Question
1.) Three Waters Co. currently has $645,000 in total assets and sales of $1,550,000. Half of Three Waterss total assets come from net fixed assets,
1.) Three Waters Co. currently has $645,000 in total assets and sales of $1,550,000. Half of Three Waterss total assets come from net fixed assets, and the rest are current assets. The firm expects sales to grow by 18% in the next year. According to the AFN equation, the amount of additional assets required to support this level of sales is $________. (Note: Round your answer to the nearest whole number.)
2.) Three Waters was using its fixed assets at only 95% of capacity last year. How much sales could the firm have supported last year with its current level of fixed assets? (Note: Round your answer to the nearest whole number.)
A. $1,794,737
B. $1,386,842
C. $1,631,579
D. $1,957,895
3.) When you consider that Three Waterss fixed assets were being underused, its target fixed assets to sales ratio should be _________%. (Note: Round your answer to two decimal places.)
4.) When you consider that Three Waterss fixed assets were being underused, how much fixed assets must Three Waters raise to support its expected sales for next year? (Note: Round your answer to the nearest whole number.)
A. $39,022
B. $42,924
C. $46,826
D. $33,169
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started