Monika's Dinor is operating at 94 percent of its fixed asset capacity and has current sales of $611,000.How much can the firm grow before any new fixed assets are needed?
A)4.99 percent
B)5.78 percent
C)6.02 percent
D)6.38 percent
E)6.79 percent

Question

Quizplus · Accepted Answer

Full-capacity sales = $611,000/0.94 = $650,000Maximum growth without additional assets = ($650,000/$611,000) - 1 = 6.38 percent

Monika's Dinor Is Operating at 94 Percent of Its Fixed