Quantitative Problem 2: Mitchell Manufacturing Company has $1,800,000,000 in sales and $320,000,000 in fixed assets. Currently, the company's fixed assets are operating at 70% of capacity. a. What level of sales could Mitchell have obtained if it had been operating at full capacity? Do not round intermediate calculations. Round your answer to the nearest dollar. $ 253333 ✔✔ b. What is Mitchell's Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to two decimal places. 12.63 % c. If Mitchell's sales increase by 55%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to the nearest dollar. 175075
Quantitative Problem 2: Mitchell Manufacturing Company has $1,800,000,000 in sales and $320,000,000 in fixed assets. Currently, the company's fixed assets are operating at 70% of capacity. a. What level of sales could Mitchell have obtained if it had been operating at full capacity? Do not round intermediate calculations. Round your answer to the nearest dollar. $ 253333 ✔✔ b. What is Mitchell's Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to two decimal places. 12.63 % c. If Mitchell's sales increase by 55%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to the nearest dollar. 175075
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
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Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Transcribed Image Text:Quantitative Problem 2: Mitchell Manufacturing Company has $1,800,000,000 in sales and $320,000,000 in fixed assets. Currently, the company's fixed
assets are operating at 70% of capacity.
a. What level of sales could Mitchell have obtained if it had been operating at full capacity? Do not round intermediate calculations. Round your answer to the
nearest dollar.
253333
b. What is Mitchell's Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to two decimal places.
12.63
%
c. If Mitchell's sales increase by 55%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio? Do not round
intermediate calculations. Round your answer to the nearest dollar.
175978
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