Problembces sales last year were 415000 and its year-end, Ask an Expert

Accounting

Problem:

BCES sales last year were $415,000, and its year-end total assets were $355,000. The average firm in the industry has a total assets turnover ratio (TATO) of 2.4. Bonner's new CFO believes the firm has excess assets that can be sold so as to bring the TATO down to the industry average without affecting sales.

Required:

By how much must the assets be reduced to bring the TATO to the industry average, holding sales constant?

$164,330
$172,979
$182,083
$191,188
$200,747

Note: Explain all steps comprehensively.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91172512

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