Water and Power Co. (W&P) currently has $575,000 in total assets and sales of $1,720,000. Half of W&Ps total assets come from net fixed assets, and the rest are current assets. The firm expects sales to grow by 19% in the next year. According to the additional funds needed (AFN) equation, the amount of additional assets required to support this level of sales is

. This year, the company is currently operating at full capacity.

W&P was using its fixed assets at only 96% of capacity last year. What amount of sales could the firm have supported last year?

$1,791,667

$1,522,917

$1,881,250

$1,612,500

When you consider that W&Ps fixed assets were being underused last year, its target fixed assets to sales ratio should be

%.

The firm expects sales to grow by 19% in the next year. When you consider that W&Ps fixed assets were being underused last year, what amount of fixed assets must W&P raise to support its expected sales for next year?

$42,987

$34,799

$40,940

$36,846