Hodgkiss Mig, Inc, is currently operating at only 92 percent of fixed asset capacityCurrent sales are $780,000. Fixed assets are $470,000 and sales are projected to growto $880,000. How much in new foxed assets are required to support this growth in sales?Assume the company wants to operate at full capacity (Do not round intermediatecelculetions and round your answer to 2 decimal places,e.g.. 32.16)O Answer is complete but not entirely correct.New fxed assets487 B72000

Step1: Calculating the value of full capacity sales. We have,Full capacity sales = Current Sales /…

Answered: Hodgkiss Mig, Inc, is currently…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 6P

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Similar questions

Thorpe Mfg., Inc., is currently operating at only 96 percent of fixed asset capacity. Current sales are $330,000. Suppose fixed assets are $300,000 and sales are projected to grow to $352,000. How much in new fixed assets is required to support this growth in sales?
Hodgkiss Mfg., Inc., is currently operating at only 76 percent of fixed asset capacity. Fixed assets are $410,400. Current sales are $540,000 and projected to grow to $781,579. How much in new fixed assets are required to support this growth in sales? Assume the company wants to operate at full capacity.
Seaweed MFG, INC. is currently operating at only 78 percent of fixed asset capacity. Fixed assets are $401,800. Current sales are $ 490,000 and projected to grow to $ 747,564. How much in new fixed assets are required to support this growth in sales? Assume the company maintains its current operating capacity.
Mitchell Manufacturing Company has $1,600,000,000 in sales and $390,000,000 in fixed assets. Currently, the company's fixed assets are operating at 70% of capacity. What level of sales could Mitchell have obtained if it had been operating at full capacity? Do not round intermediate calculations. Round your answer to the nearest dollar.$ What is Mitchell's Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to two decimal places. % If Mitchell's sales increase by 50%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to the nearest dollar.
ABC., Inc., is currently operating at only 75 percent of fixed asset capacity. Current sales are $850,000. How much can sales increase before any new fixed assets are needed?
Earleton Manufacturing Company has $3 billion in sales and $661,000,000 in fixed assets. Currently, the company's fixed assets are operating at 80% of capacity. a. What level of sales could Earleton have obtained if it had been operating at full capacity? Write out your answers completely. For example, 13 million should be entered as 13,000,000. Round your answer to the nearest dollar.$ ____ b. What is Earleton's target fixed assets/sales ratio? Do not round intermediate calculations. Round your answer to two decimal places. % ____ c. If Earleton's sales increase 30%, how large of an increase in fixed assets will the company need to meet its target fixed assets/sales ratio? Write out your answer completely. Do not round intermediate calculations. Round your answer to the nearest dollar.$ ____
Last year, YG had P250,000,000 of sales and P100,000,000 of fixed assets, so its FA/Sales ratio was 40%. However, its fixed assets were used at only 75% of capacity. Now, the company is developing its financial forecast for the coming year. As part of that process, the company wants to set its target Fixed Asset/Sales Ratio at the level it would have had it been operating at full capacity. What target FA/Sales ratio should the company set? ANSWER FORMAT: 20%
Colter Steel has $5,300,000 in assets. Temporary current assets $ 2,600,000 Permanent current assets 1,580,000 Fixed assets 1,120,000 Total assets $ 5,300,000 Assume short-term interest rates are 11 percent and long-term rates are 2 percentage points lower than short-term rates. Earnings before interest and taxes are $1,120,000. The tax rate is 20 percent. If long-term financing is perfectly matched (synchronized) with long-term asset needs, and the same is true of short-term financing, what will earnings after taxes be? Earnings after taxes
Newtown Propane currently has $645,000 in total assets and sales of $1,720,000. Half of Newtown’s total assets come from net fixed assets, and the rest are current assets. The firm expects sales to grow by 22% in the next year. According to the AFN equation, the amount of additional assets required to support this level of sales is $ Newtown was using its fixed assets at only 95% of capacity last year. How much sales could the firm have supported last year with its current level of fixed assets? $1,720,000 $1,629,473 $1,448,421 $1,810,526 When you consider that Newtown’s fixed assets were being underused, its target fixed assets to sales ratio should be %. When you consider that Newtown’s fixed assets were being underused, how much fixed assets must Newtown raise to support its expected sales for next year? $41,022 $46,150 $48,714 $51,278
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Blue Sky Mfg., Inc., is currently operating at 90 percent of fixed asset capacity. Current sales are $712,000 and sales are projected to grow to $930,000. The current fixed assets are $686,000. How much in new fixed assets is required to support this growth in sales
Western Gas & Electric Co. (WG&E) had sales of $1,790,000 last year on fixed assets of $380,000. Given that WG&E’s fixed assets were being used at only 95% of capacity, then the firm’s fixed asset turnover ratio was . How much sales could Western Gas & Electric Co. (WG&E) have supported with its current level of fixed assets? $1,978,422 $2,072,632 $1,884,211 $1,507,369 When you consider that WG&E’s fixed assets were being underused, what should be the firm’s target fixed assets to sales ratio? 21.18% 22.19% 20.17% 16.14% Suppose WG&E is forecasting sales growth of 20% for this year. If existing and new fixed assets are used at 100% capacity, the firm’s expected fixed assets turnover ratio for this year is ?

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