Calculate the new efn with this assumption

Reference no: EM13304140

Most assets can be increased as a percentage of sales. For instance cash can be increased by any amount. However, fixed assets must be increased in specific amounts because it is impossible, to buy part of a plant. In this case, a company has a staircase or lumpy fixed cost structure. Assume S&S Air is currently producing at 100 percent capacity. As a result to increase production the company must set up an entirely new line at a cost of $5,000,000. Calculate the new EFN with this assumption.

Reference no: EM13304140

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