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The sales of Ester Company last year were $415,000, and its year-end total assets were $355,000. The average firm in the industry has a total
The sales of Ester Company last year were $415,000, and its year-end total assets were $355,000. The average firm in the industry has a total assets turnover ratio of 2.4. Ester Companys new Chief Financial Officer believes the company has excess assets that can be sold so as to bring the total assets turnover ratio down to the industry average without the affecting sales. By how much must the assets be reduced to bring the total assets turnover ratio to the industry average, holding sales constant?
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