Warsaw Incorporated Is Currently Operating at 80% of Capacity

question 71

Multiple Choice

Warsaw Incorporated is currently operating at 80% of capacity.The sales of Warsaw were $25 million this year and their net plant and equipment were valued at $100 million.Sales are expected to increase to $35 million next year.How much additional plant and equipment will Warsaw need to acquire to keep production up with the new level of sales?

• A) $20 million
• B) $15 million
• C) $12 million
• D) $10 million
• E) No additional plant and equipment is needed.