North Construction had $850 million of sales last year, and it had $425 million of fixed assets that were used at only 90% of capacity. What is the maximum sales growth rate North could achieve before it had to increase its fixed assets?

a. 11.11%

b. 16.81%

c. 13.96%

d. 5.41%

e. 8.26

Question

Moses Contreras

Business

22 July, 17:51

North Construction had $850 million of sales last year, and it had $425 million of fixed assets that were used at only 90% of capacity. What is the maximum sales growth rate North could achieve before it had to increase its fixed assets?

a. 11.11%

b. 16.81%

c. 13.96%

d. 5.41%

e. 8.26

+3

Answers (1)

Know the Answer?

Kaylynn Salinas · Answer 1

a. 1.11%

Explanation:

The computation of the maximum sales growth rate is shown below:-

Sales 90% Capacity = $850,000,000

Sales at 100% Capacity = $850,000,000 : 90% * 100%

= $944,444,444.4

Growth in Sales by using unused capacity = Sales at 100% Capacity - Sales 90% Capacity

=$944,444,444.4 - $850,000,000

= $94,444,444.4

Growth rate = Growth in Sales by using unused capacity : Sales last year

-94444444.4 : $850,000,000

= 1.11%

North Construction had $850 million of sales last year, and it had $425 million of fixed assets that were used at only 90% of capacity. What is the maximum sales growth rate North could achieve before it had to increase its fixed assets?a. 11.11%b. 16.81%c. 13.96%d. 5.41%e. 8.26

North Construction had $850 million of sales last year, and it had $425 million of fixed assets that were used at only 90% of capacity. What is the maximum sales growth rate North could achieve before it had to increase its fixed assets?

a. 11.11%

b. 16.81%

c. 13.96%

d. 5.41%

e. 8.26