Year Jain Technologies Had $250 Million of Sales and $100

question 44

Multiple Choice

year Jain Technologies had $250 million of sales and $100 million of fixed assets, so its FA/Sales ratio was 40%.However, its fixed assets were used at only 75% 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?

• A)28.5%
• B)30.0%
• C)31.5%
• D)33.1%
• E)34.7%

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Definitions:

Entry Barriers

Obstacles that make it difficult for new competitors to enter a market, which can include high startup costs, regulatory requirements, and strong brand loyalty among existing customers.

Dominant Firms

Companies that have a major share of sales in a particular market, giving them significant power over the market price.

Monopolistic Competition

A market structure where many companies sell products that are similar but not identical, allowing for competition based on quality, price, and marketing.

Large Number

In economics, it often refers to a market condition where there are many buyers and sellers, leading to competitive prices.