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Homework answers / question archive / Last year Baron Enterprises had $875 million of sales, and it had $270 million of fixed assets that were used at 65% of capacity last year

Last year Baron Enterprises had $875 million of sales, and it had $270 million of fixed assets that were used at 65% of capacity last year

Finance

Last year Baron Enterprises had $875 million of sales, and it had $270 million of fixed assets that were used at 65% of capacity last year. In millions, by how much could Baron's sales increase before it is required to increase its fixed assets?

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Computation of the sales increase before it is required to increase its fixed assets:-

Sales at 100% capacity = Current sales / Operating capacity

= $875 / 65%

= $1,346.15 million

Increase in sales = Sales at 100% capacity - Current sales

= $1,346.15 - $875

= $471.15 million

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