Please explain the correct approach for solving this general accounting question. Lariat Corp. recorded $420 million in sales last year and had $300million in fixed assets, which were utilized at 70% of capacity.By how much can sales increase before Lariat Corp. needs to add toits fixed assets?

Step 1: Definition of Sales Capacity in Relation to Fixed AssetsSales capacity in relation to fixed…

Answered: Lariat Corp. recorded $420 million in…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 7P

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Horizon Tech had $500 million in sales last year and $350 million in fixed assets, which were used at 70% of capacity. By how much can Horizon Tech's sales increase before it must expand its fixed assets? A) $185.71 million B) $200.00 million. C) $214.29 million D) $228.57 million. E) $240.00 million
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How much sales increase before it is required to increase

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Lariat Corp. recorded $420 million in sales last year and had $300 million in fixed assets, which were utilized at 70% of capacity. By how much can sales increase before Lariat Corp. needs to add to its fixed assets?