68 751
Assignments Done
100%
Successfully Done
In January 2019

Answer to Question #13219 in Other Management for John

Question #13219
4. Last year Jain Technologies had $250 million of sales and$100 million of fixed assets, so its FA/Sales ratio was 40%. However, its fixed assets were used at only 75% of capacity. Now the company is developing its financial forecast for the coming year. As part of that process, the company wants to set its target Fixed Assets/Sales ratio at the level it would have had had it been operating at full capacity. What target FA/Sales ratio should the company set?
a. 28.5%
b. 30.0%
c. 31.5%
d. 33.1%
e. 34.7%

Explanation: Total fixed assets used were 75% of $100 million =$ 75 million
The formula is FA/Sales ratio = 75 million/ 250 million = 30%

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!