5. Excess capacity adjustments

Water and Power Co. (W&P) had sales of $1,720,000 last year on fixed assets of $330,000. Given that W&Ps fixed assets were being used at only 93% of capacity, then the firms fixed asset turnover ratio was

x. (Note: Round your answer to two decimal places.)

How much sales could Water and Power Co. (W&P) have supported with its current level of fixed assets? (Note: Round your answer to the nearest whole number.)

$1,756,989

$1,849,462

$1,664,516

$2,219,354

When you consider that W&Ps fixed assets were being underused, what should be the firms target fixed assets to sales ratio? (Note: Round your answer to two decimal places.)

21.41%

17.84%

16.95%

16.06%

Suppose W&P is forecasting sales growth of 19% for this year. If existing and new fixed assets are used at 100% capacity, the firms expected fixed-assets turnover ratio for this year is .(Note: Round your answer to two decimal places.)