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...


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








Jun 07, 2022
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