What is edneys target fixed assets and sales ratio

Assignment Help Financial Management

Reference no: EM131305119

Edney Manufacturing Company has $2 billion in slaes and $0.6 billion in fixed assets. Currently, the company's fixed assets are operating at 80% of capacity.

a. What level of sales could Edney have obtained if it had been operating on full capacity?

b. What is Edney's Target fixed assets/Sales ratio?

c. If Edney's sales increase 30%, how large of an increase in fixed assets wil the company need to meet its Target fixed assets/Sales ratio?

Reference no: EM131305119

Questions Cloud

What would cost of equity be if the debt-equity ratio : Twice Shy Industries has a debt−equity ratio of 1.3. Its WACC is 7.1 percent, and its cost of debt is 6.6 percent. The corporate tax rate is 35 percent. What would the cost of equity be if the debt−equity ratio were 1.0?

What are the options market value and the price of stock : Options The exercise price on one of Flanagan Company's options is $15, its exercise value is $22, and its time value is $7. What are the option's market value and the price of the stock?

Why don'' insurance companies offer income insurance : With income insurance, if a person loses his job or doesn't get as big a raise as anticipated, he would be compensated under his insurance coverage. Why don't insurance companies offer income insurance of this type?

Describe some of the information problems : Describe some of the information problems in the financial system that lead firms to rely more heavily on internal funds than external funds to finance their growth.

What is edneys target fixed assets and sales ratio : Edney Manufacturing Company has $2 billion in slaes and $0.6 billion in fixed assets. Currently, the company's fixed assets are operating at 80% of capacity. What level of sales could Edney have obtained if it had been operating on full capacity? Wha..

Does a market maker have different responsibilities : Does a market maker have different responsibilities than a financial firm that is providing investment advice for clients?

Deal for an investor than a simpler product : Why would a more complex financial product be likely to be a worse deal for an investor than a simpler product?

What is the relevant yield : Alpha Bonds have a coupon rate of 7% with semiannual coupon payments, a face value of $1,000, and 6 years to go until maturity. Gamma Bonds have a coupon rate of 12% with semiannual interest payments, a face value of $1,000,and 20 years to go until m..

Evaluate the impact of contemporary hr practices : Have a clear understanding of, and an ability to critically evaluate HRM and its role within the organisation and the wider the global environment - Be able to critically evaluate the main processes of employee resourcing, development, relations a..

User Account

All Pages