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Last year Boston Breweries had $300 million of sales and $120 million of fixed assets, so its Fixed Assets/Sales ratio was 40%. However, its fixed
Last year Boston Breweries had $300 million of sales and $120 million of fixed assets, so its Fixed Assets/Sales ratio was 40%. However, its fixed assets were used at only 42% of capacity. Now the company is developing its financial forecast for the coming year. As part of that process, the company wants to set its target Fixed Assets/Sales ratio at the level, it would have had, had it been operating at full capacity. What target Fixed Assets/Sales ratio should the company set?
a. 17.25%
b. 16.20%
c. 16.80%
d. 15.80%
e. 20.3%
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