Answered step by step
Verified Expert Solution
Question
1 Approved Answer
3. Excess capacity adjustments Osato Chemicals Inc. currently has $490,000 in total assets and sales of $1,720,000. Half of Osato's total assets come from net
3. Excess capacity adjustments Osato Chemicals Inc. currently has $490,000 in total assets and sales of $1,720,000. Half of Osato's total assets come from net fixed assets, and the rest are current assets. The firm expects sales to grow by 19% in the next year. According to the AFN equation, the amount of additional assets required to support this level of sales is $ Osato was using its fixed assets at only 92% of capacity last year. How much sales could the firm have supported last year with its current level of fixed assets? O $1,869,565 O $1,776,087 O $1,495,652 O $2,056,522 When you consider that Osato's fixed assets were being underused, its target fixed assets to sales ratio should be %. When you consider that Osato's fixed assets were being underused, how much fixed assets must Osato raise to support its expected sales for next year? O $25,549 O $22,065 O $18,581 O $23,226
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