Last year National Aeronautics had a FA/Sales ratio of 40%, comprised of $250 mi

Question

Last year National Aeronautics had a FA/Sales ratio of 40%, comprised of $250 million of sales and $100 million of fixed assets. However, its fixed assets were used at only 40% 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 Assets/Sales ratio at the level it would have had had it been operating at full capacity. What target FA/Sales ratio should the company set?

Select the correct answer.

a. 15.0% b. 14.5% c. 15.5% d. 16.5% e. 16.0%

Explanation / Answer

i think that

e. 16.0%

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