Dawson manufacturing is currently operating at 85 percent of fixed asset capacity. Current Sales = $1,200,000 Current Fixed Asset Utilization = 85% How much can sales increase before new fixed assets are needed?
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- Thorpe Mfg., Inc., is currently operating at only 96 percent of fixed asset capacity. Current sales are $330,000. Suppose fixed assets are $300,000 and sales are projected to grow to $352,000. How much in new fixed assets is required to support this growth in sales?Williamson Industries has $3 million in sales and $2.838 million in fixed assets. Currently, the company's fixed assets are operating at 90% of capacity. a. What level of sales could Williamson Industries have obtained if it had been operating at full capacity? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest cent. 2$ b. What is Williamson's target fixed assets/sales ratio? Do not round intermediate calculations. Round your answer to two decimal places. % c. If Williamson's sales increase 14%, how large of an increase in fixed assets will the company need to meet its target fixed assets/sales ratio? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to the nearest cent.A firm's current capacity utilization is 80%. The firm's current net property, plant and equipment is $1,050,000 and is 100% of current sales. What is the projected net property, plant and equipment if the firm's sales grow by 7.5%?
- Blue Sky Mfg., Inc., is currently operating at 90 percent of fixed asset capacity. Current sales are $712,000 and sales are projected to grow to $930,000. The current fixed assets are $686,000. How much in new fixed assets is required to support this growth in salesEarleton Manufacturing Company has $3 billion in sales and $661,000,000 in fixed assets. Currently, the company's fixed assets are operating at 80% of capacity. a. What level of sales could Earleton have obtained if it had been operating at full capacity? Write out your answers completely. For example, 13 million should be entered as 13,000,000. Round your answer to the nearest dollar.$ ____ b. What is Earleton's target fixed assets/sales ratio? Do not round intermediate calculations. Round your answer to two decimal places. % ____ 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? Write out your answer completely. Do not round intermediate calculations. Round your answer to the nearest dollar.$ ____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% ofcapacity.a. What level of sales could Earleton have obtained if it had been operating at fullcapacity?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 thecompany need to meet its target fixed assets/sales ratio?
- Buzzy Manufacturing Company has P2 billion in sales and P0.6 billion in fixed assets. Currently, the company’s fixed assets are operating at 80% of capacity. What level of sales could Buzzy have obtained if it have been operating at full capacity? What is Buzzy’s target fixed assets to sales ratio? If Buzzy’s sales increased by 30%, how large is the increase in fixed assets will the company need to meet its target fixed assets to sales?Database Systems is considering expansion into a new product line. Assets to support expansion will cost $740,000. It is estimated that Database can generate $1,910,000 in annual sales, with a 4 percent profit margin. What would net income and return on assets (investment) be for the year?Hodgkiss Mfg., Inc., is currently operating at only 77 percent of fixed asset capacity. Fixed assets are $400,400. Current sales are $520,000 and projected to grow to $736,104. How much in new fixed assets are required to support this growth in sales? Assume the company wants to operate at full capacity.
- Williamson Industries has $7 billion in sales and $1.944 billion in fixedassets. Currently, the company’s fixed assets are operating at 90% of capacity.a. What level of sales could Williamson Industries have obtained if it had been operatingat full capacity?b. What is Williamson’s target fixed assets/sales ratio?c. If Williamson’s sales increase 15%, how large of an increase in fixed assets will thecompany need to meet its target fixed assets/sales ratio?1. AAI, Inc., forecasts unit sales for a potential new product as follows: Year Units of Output 95,000 107,000 110,000 The initial investment in Net Working Capital (NWC) is $1,500,000. At the end of the project, the investment in NWC is expected to be fully recovered. Total fixed costs are $1,750,000 each year, variable costs are $280 per unit, and the units are sold at $330 each. The new equipment is expected to cost S4,400,000 and will be depreciated using the 3-year MACRS depreciation schedules (relevant depreciation rates are 33% in year 1, 45% in year 2, 15% in year 3 and 7% in year 4). At the end of three years the equipment can be sold for $100,000. If the new project is taken, there will be a negative effect on the firm's existing products - cash flow from the firm's existing products will decrease by 88,000 on a post-tax basis in years 1, 2, and 3. The tax rate s 40% and AAI Inc's cost ofcapital is 12% Compute the (i) payback period, (ii) NPV, (iii) IRR, and (iv)…A proposed project has fixed costs of $48,000 per year. The operating cash flow at 11,000 units is $85,000 units. What is the new degree of operating leverage?