Earleton Manufacturing Company has $3 billion in sales and $787,500,000 in fixed assets. Currently, the companys fixed

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Earleton Manufacturing Company has $3 billion in sales and $787,500,000 in fixed assets. Currently, the company’s fixed assets are operating at 80% of capacity.

a. What level of sales could Earleton have obtained if it had been operating at full capacity?

b. What is Earleton’s target fixed assets/sales ratio?

c. If Earleton’s sales increase 30%, how large of an increase in fixed assets will the company need to meet its target fixed assets/sales ratio?

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Fundamentals of Financial Management

ISBN: 978-1337395250

15th edition

Authors: Eugene F. Brigham, Joel F. Houston

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Question Posted: Jan 08, 2019 12:06 PM

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Earleton Manufacturing Company has $3 billion in sales and $787,500,000 in fixed assets. Currently, the companys fixed

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a Sales 3000000000 FA 787500000 FA are operated at 80 capacity Full capacity sales Actual sal...View the full answer

Fundamentals of Financial Management

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