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a) x(0.90) = $5 billion, where x equal sales if operating at full capacity
Divide $5 billion by 0.90 to obtain the answer = $5,555,555,555.56
b) Fixed assets/Sales = $1.7/5.0 = 0.34
c) Sales increase by 12% = $5.0 billion (1.12) = $5.6 billion
x/5.6 = 0.34
Solve for x = 0.34*5.6 = $1.904B
The question, however, asks for how large of an increase you will need in fixed assets. Currently you have $1.7 billion, so find the difference
$1.904 - $1.7 = $0.204B, or $204M increase in fixed assets
I need help understanding a company's sales statement.