Osato Chemicals Inc. currently has $540,000 in total assets and sales of $1,720,000. 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 $ ________.

Osato was using its fixed assets at only 93% of capacity last year. How many sales could the firm have supported last year with its current level of fixed assets?

a.) $1,479,570

b.) $1,756,989

c.) $2,219,354

d.) $1,849,462

When you consider that Osato’s fixed assets were being underused, its target fixed assets to sales ratio should be _________ %.

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?

a.) $33,831

b.) $40,597

c.) $32,139

d.) $27,065