A Toronto firm has current sales of $1,465,000 and is operating at 87% of its fixed asset capacity. How fast can the firm grow before any new fixed assets are needed?

Question

Quizplus · Accepted Answer

The firm is operating at 87% capacity, so it can grow up to 100% capacity without needing new fixed assets. The growth rate can be calculated as (100% - 87%) / 87% = 13% / 87% = 0.1494 or 14.94%.

A Toronto Firm Has Current Sales of $1,465,000 and Is