Analyze Tangible Capital Assets}

Lanka Industries is a technology company that operates in a highly competitive environment. In 2015 , management had significantly curtailed its capital expenditures due to cash flow problems. Lanka reported the following information for 2018:

- Net tangible capital assets (beginning of year), \(\$ 489,000\)

- Net tangible capital assets (end of year), \(\$ 505,000\)

- Net sales, \(\$ 1,025,000\)

- Accumulated depreciation (end of year), \(\$ 543,000\)

- Depreciation expense, \(\$ 126,000\)

An analyst reviewing Lanka's financial history noted that Lanka had previously reported tangible capital asset turnover ratios and average age of its assets as follows:

During this time frame, the industry average tangible capital asset turnover ratio is 2.46 and the industry average age of assets is 1.79 years.
\section*{Required:}
1. Compute Lanka's tangible capital asset turnover ratio for 2018 .
2. Compute the average age of Lanka's tangible capital assets for 2018 .
3. CONCEPTUAL CONNECTION Comment on Lanka's tangible capital asset turnover ratios and the average age of the tangible capital assets.
\section*{OBJECTIVE (10 Exercise

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2013 2014 2015 2016 2017 Tangible capital asset turnover 2.48 2.45 2.74 2.57 2.33 Average age of assets (years) 1.81 1.79 1.94 2.81 3.74