4.Excess Capacity adjustments

Monk Consortium Corp. (Monk-Con) had sales of $1,790,000 last year on fixed assets of $395,000. Given that Monk-Con's fixed assets were being used at only 92% of capacity, then the firm's fixed asset turnover ratio was ____________________

How much sales could Monk Consortium Corp.(Monk-Con) have supported with its current level of fixed assets?

a. $1,653,804

b. $1,848,369

c. $1,945,652

d. $1,751,087

When you consider that Monk-Con's fixed assets were being underused, what should the firm's target fixed assets to sales ratio?

a. 20.30%

b. 17.26%

c. 21.32%

d. 19.29%

Suppose Monk-Con is forecasting sales growth of 19% for this year. If existing and new fixed assets are used at 100% capacity, the firm's expected fixed-assets turnover ratio for this year is __________?

a.5.911x

b. 4.926

c.5.419x

d.5.172x