Walter Industries has $5 billion in sales and $1.7 billion in fixed assets. Currently, the company's Excess capacity fixed assets are operating at 90 percent of capacity.

a. YVTiat level of sales could Walter Industries have obtained if it had been operating at full capacity?

b. What is Walter's target fixed assets/sales ratio?

c. If Walter's sales increase 12 percent, how large of an increase in fixed assets would the company need in order to meet its target fixed assets/sales ratio?

AppendixLO1