Water and Power Co. (W&P) had sales of $1,790,000 last year on fixed assets of $345,000. Given that W&P’s fixed assets were being used at only 95% of capacity, then the firm’s fixed asset turnover ratio was
Water and Power Co. (W&P) had sales of $1,790,000 last year on fixed assets of $345,000. Given that W&P’s fixed assets were being used at only 95% of capacity, then the firm’s fixed asset turnover ratio was
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Water and Power Co. (W&P) had sales of $1,790,000 last year on fixed assets of $345,000. Given that W&P’s fixed assets were being used at only 95% of capacity, then the firm’s fixed asset turnover ratio was
x. (Note: Round your answer to two decimal places.)
How much sales could Water and Power Co. (W&P) have supported with its current level of fixed assets? (Note: Round your answer to the nearest whole number.)
$1,695,790
$1,978,422
$1,884,211
$1,790,000
When you consider that W&P’s fixed assets were being underused, what should be the firm’s target fixed assets to sales ratio? (Note: Round your answer to two decimal places.)
19.23%
17.39%
18.31%
16.48%
Suppose W&P 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 _______________ .(Note: Round your answer to two decimal places.)
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