Quantitative Problem 2: Mitchell Manufacturing Company has $1,600,000,000 in sales and $290,000,000 in fixed assets. Currently, the company's fixed assets are operating at 75% of capacity. a. What level of sales could Mitchell have obtained if it had been operating at full capacity? Do not round intermediate calculations. Round your answer to the nearest dollar. b. What is Mitchell's Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to two decimal places. c. If Mitchell's sales increase by 35%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to the nearest dollar.

Quantitative Problem 2: Mitchell Manufacturing Company has $1,600,000,000 in sales and $290,000,000 in fixed assets. Currently, the company's fixed assets are operating at 75% of capacity. a. What level of sales could Mitchell have obtained if it had been operating at full capacity? Do not round intermediate calculations. Round your answer to the nearest dollar. b. What is Mitchell's Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to two decimal places. c. If Mitchell's sales increase by 35%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to the nearest dollar.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 2STP

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