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 96% 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.)

$1,791,667

$1,702,084

$1,612,500

$1,881,250

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.)

17.50%

18.42%

16.58%

19.34%

Suppose W&P is forecasting sales growth of 20% 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.)