Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Subject:- finance 

Excel Online Structured Activity: Excess capacity
Earleton Manufacturing Company has $2 billion in sales and $700,000,000 in fixed assets. Currently, the company's fixed assets are operating at 75% of capacity. The data has
been collected the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.
Open spreadsheet
a. What level of sales could Earleton have obtained if it had been operating at full capacity? Write out your answer completely. Round your answer to the nearest cent.
$
b. What is Earleton's target fixed assets/sales ratio? Round your answer to two decimal places.
11
12
c. If Earleton's sales increase 35%, 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.
$
%
Check My Work
Reset Problem
1 Excess capacity
2
3
4
5
Sales
Fixed assets
% Fixed assets capacity
6
7
8
9
10 Calculation of Target Fixed Assets-to-Sales Ratio:
Target fixed assets-to-sales ratio
Cacluation of Full Capacity Sales:
Full capacity sales
% Sales increase
A
13
14
15
16 New sales level
17
18
Calculation of Fixed Assets Increase Needed:
Increase in fixed assets
B
$2,000,000,000.00
$700,000,000.00
75.00%
35.00%
с
D
Formulas
#N/A
#N/A
#N/A
#N/A
expand button
Transcribed Image Text:Excel Online Structured Activity: Excess capacity Earleton Manufacturing Company has $2 billion in sales and $700,000,000 in fixed assets. Currently, the company's fixed assets are operating at 75% of capacity. The data has been collected the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. What level of sales could Earleton have obtained if it had been operating at full capacity? Write out your answer completely. Round your answer to the nearest cent. $ b. What is Earleton's target fixed assets/sales ratio? Round your answer to two decimal places. 11 12 c. If Earleton's sales increase 35%, 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. $ % Check My Work Reset Problem 1 Excess capacity 2 3 4 5 Sales Fixed assets % Fixed assets capacity 6 7 8 9 10 Calculation of Target Fixed Assets-to-Sales Ratio: Target fixed assets-to-sales ratio Cacluation of Full Capacity Sales: Full capacity sales % Sales increase A 13 14 15 16 New sales level 17 18 Calculation of Fixed Assets Increase Needed: Increase in fixed assets B $2,000,000,000.00 $700,000,000.00 75.00% 35.00% с D Formulas #N/A #N/A #N/A #N/A
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