Problem1. Edney Manufacturing Company has $3 billion in sales and $0.7 billion in fixed assets. Currently, the company's fixed assets are operating at 80% of capacity.
i) What level of sales could Edney have obtained if it had been operating at full capacity?
ii) What is the Edney's Target fixed assets/Sales ratio?
iii) If Edney's sales rise 35%, how large of a raise in fixed assets will the company need to meet its Target fixed assets or Sales ratio?
Problem2. Describe what banks show as liabilities and assets on their balance sheets. How do these liabilities and assets vary from the position they hold on their customers' balance sheets? Why do they vary?