Solve these general accounting question not use ai Adele Corp's sales last year were $315,000, and its year-endtotal assets were $355,000. The average firm in the industryhas a total assets turnover ratio (TATO) of 2.4. The firm's newCFO believes the firms has excess assets that can be sold soas to bring the TATO down to the industry average withoutaffecting sales.By how much must the assets be reduced to bring the TATOto the industry average, holding sales constant?

Step 1: Define TATOTotal assets turnover ratio (TATO) is Sales / Average Assets.This ratio measures…

Answered: Adele Corp's sales last year were…

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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Wie Corp's sales last year were $260,000, and its year-end total assets were $360,000. The average firm in the industry has a total assets turnover ratio (TATO) of 2.4. The firm's new CFO believes the firm has excess assets that can be sold to bring the TATO down to the industry average without affecting sales. By how much must the assets be reduced to bring the TATO to the industry average, holding sales constant? Do not round your intermediate calculations.
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