Freda's, Inc. has sales of $3,200, current liabilities of $900, total assets of $3,000, and net working capital of $500. How many dollars' worth of sales are generated from every $1 in net fixed assets?
A) $.91
B) $1.07
C) $1.67
D) $2.00
E) $2.29

Question

Quizplus · Accepted Answer

Net fixed assets = Total assets - Current liabilities - Net working capital = $3,000 - $900 - $500 = $1,600. Sales per dollar of net fixed assets = $3,200 / $1,600 = $2.00.