Last Year Emery Industries Had $450 Million of Sales and $225

question 38

Multiple Choice

Last year Emery Industries had $450 million of sales and $225 million of fixed assets, so its FA/Sales ratio was 50%. However, its fixed assets were used at only 65% of capacity. If the company had been able to sell off enough of its fixed assets at book value so that it was operating at full capacity, with sales held constant at $450 million, how much cash (in millions) would it have generated?

• A) $74.81
• B) $78.75
• C) $82.69
• D) $86.82
• E) $91.16

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