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(Percentage of salesplant and equipment) A com- pany had sales last year of $16,000,000 and forecasts sales of $20,000,000 in the coming year. It ended
(Percentage of salesplant and equipment) A com- pany had sales last year of $16,000,000 and forecasts sales of $20,000,000 in the coming year. It ended the year with $5,000,000 of plant and equipment. Forecast the end-of-coming-year balance for plant and equip- ment under each of the following alternatives. a. Plant and equipment is now at capacity and will be increased proportionally to sales. b. Plant and equipment is now at capacity. New plant and equipment must be purchased in $750,000 in- crements. c. Plant and equipment is now being used at 90% of capacity. New plant and equipment will be pur- chased in the exact amount needed. d. Plant and equipment is now being used at 90% of capacity. New plant and equipment must be pur- chased in $750,000 increments
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