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How much must sales increase before firm y needs to buy

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Reference no: EM132905524

The following is Firm Y's current statement of comprehensive income.

Sales$50,000
CoGS30,000
EBDIT20,000
Depreciation10,000
EBIT10,000
Interest expense5,000
Taxable income5,000
Taxes (35%)1,750
Net Income3,250
Dividends975
Multiple Choice

Problem 1: If the firm is currently operating at 75% capacity, how much must sales increase before Firm Y needs to buy new fixed assets?

Option 1: 50%
Option 2: 75%
Option 3: 66.67%
Option 4: 33.33%
Option 5: 30%

Reference no: EM132905524

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