Hodgkiss Mig, Inc, is currently operating at only 92 percent of fixed asset capacityCurrent sales are $780,000. Fixed assets are $470,000 and sales are projected to growto $880,000. How much in new foxed assets are required to support this growth in sales?Assume the company wants to operate at full capacity (Do not round intermediatecelculetions and round your answer to 2 decimal places,e.g.. 32.16)O Answer is complete but not entirely correct.New fxed assets487 B72000

Step1: Calculating the value of full capacity sales. We have,Full capacity sales = Current Sales /…

Answered: Hodgkiss Mig, Inc, is currently…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

A company is currently operating at a sales level (D) of only 1,250 units per year, with a selling price in pesos (p) given by p = 4200 – 2.50 per unit. The fixed cost of the company is P450,000 per year and the variable cost is P325 per unit. Is the company gaining or losing? It is being planned that the company will engage in a modernization plan that would increase the fixed cost by P85,000 per year, will lower the number of units sold per year by 10 units but would reduce the variable costs by P65 per unit. Would you agree with the plan?
ABC., Inc., is currently operating at only 75 percent of fixed asset capacity. Current sales are $850,000. How much can sales increase before any new fixed assets are needed?
Please provide the correct answer
Global Imex has two divisions; one located at Accra and the other in Takoradi.The following is an extract from the annual report for the 2010 financial year ACCRA TAKORADI Profit Before Depreciation 450,000 620,000 Depreciation 120,000 130,000 Non Current Assets 1,200,000 1,300,000 Current Assets 750,000 1,000,000 Current Liabilities 350,000 400,000 Cost of Capital is 20% Required (i) Using Return on Investment (ROI) and Residual Income, comment on the performance of the divisions.(ii) The Takoradi branch intends to sell one of the non-current assets with book value of GH¢120,000. This asset generates a profit of GH¢60,000. Accra also wants to acquire another asset costing GH¢90,000 that will generate a profit of GH¢40,000. To what extent will the decisions affect the performance of the divisions?
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?
calculate all the missing values a, b, c, d, e, f, g, and h. Madison Corp. has a hurdle rate/required rate of return of 9%. Operating Average income (c) Total assets $115,000 $800,000 (a) (f) $175,000 (e) Return on Residual investment income (ROI) $1,350,000 17% $46,800 (h) $750,000 (g) 13% (RI) (b) (d) $31,000 $36,000 ?
Please help and only correct please with steps and dont do handwritten.
Please complete all requirement and Do Not Give solve in imamge format
1 Last year Baron Enterorises had $350 million of sales, and it had $270 million of fixed assets that were used at 65% of capacity last year. In millions, by how much could Baron's sales increase before it is required to increase its fixed assets? Answer $170.09 S179.04 S188.46 S197.88 $207.78
Western Gas & Electric Co. (WG&E) had sales of $1,550,000 last year on fixed assets of $270,000. Given that WG&E’s fixed assets were being used at only 94% of capacity, then the firm’s fixed asset turnover ratio was? How much sales could Western Gas & Electric Co. (WG&E) have supported with its current level of fixed assets? When you consider that WG&E’s fixed assets were being underused, what should be the firm’s target fixed assets to sales ratio? Suppose WG&E is forecasting sales growth of 22% for this year. If existing and new fixed assets are used at 100% capacity, the firm’s expected fixed assets turnover ratio for this year is?
Q1. A company has direct production costs equal to 57.74 percent of total annual sales, and fixed charges, overhead, and general expenses equal to 0.29. If management proposes to increase present annual sales of 4.5 million by 29.4 percent with a 15.33 percent increase in fixed charges, overhead, and general expenses. Estimate a) Annual sales amount that is required to provide the same gross earnings as the present plant operation? b) Net profit if the expanded plant were operated at full capacity with an income tax on gross earnings of 35 percent? c) Net profit for the enlarged plant if total annual sales remained at 4.5 million? d) Net profit for the enlarged plant if the total annual sales actually decreased by 100,000?
None

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