Info
Warning
Danger
/ Homework Answers / Finance / Thorpe Mfg., Inc., currently operating at only 86 percent of

Question : Thorpe Mfg., Inc., currently operating at only 86 percent of

Thorpe Mfg., Inc., is currently operating at only 86 percent of fixed asset capacity. Current sales are $320,000. How fast can sales grow before any new fixed assets are needed? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Thorpe Mfg., Inc., is currently operating at only 86 percent of fixed asset capacity. Current sales are $320,000. How fast can sales grow before any new fixed assets are needed? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Solution

Current Sales are $320,000. This is 86% of fixed asset capacity. To find the sales at maximum 100% capacity we divide $320,000 by 0.86 which gives $372,093.

Additional sales required to acheive maximum sales will be $372,093 - $320,000 = $52,093

The maximum sales growth as a percentage would be $52,093 / $320,000 = 0.1628 or 16.28%

Thus Maximum sales growth : 16.28

Solution
5 (1 Ratings )

Solved
Finance 5 Months Ago 92 Views
This Question has Been Answered!
Premium Content -

Unlimited Access

Explore More than 2 Million+
  • Textbook Solutions
  • Flashcards
  • Homework Answers
  • Documents
Signup for Better Grades!

Ask an Expert

Our Experts can answer your tough homework and study questions
275782 Finance Questions Answered!
Post a Question