$3.$ Excess capacity adjustments

Osato Chemicals Inc. currently has $$575,000$ in total assets and sales of $$1,550,000.$ Half of Osato$$s total assets come from net fixed assets, and the rest are current assets. The firm expects sales to grow by $21\%$ in the next year. According to the AFN equation, the amount of additional assets required to support this level of sales is $

$120,750$

$.$

Osato was using its fixed assets at only $94\%$ of capacity last year. How much sales could the firm have supported last year with its current level of fixed assets?

$$1,648,936$

$$1,401,596$

$$1,319,149$

$$1,484,042$

When you consider that Osato$$s fixed assets were being underused, its target fixed assets to sales ratio should be

$17\mathrm{.}45$

$\%.$

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?

$$33,578$

$$35,553$

$$31,602$

$$39,503$