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

question 36

Multiple Choice

Last 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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