question archive What is the forecasted value of property, plan and equipment (PP&E) based on the following information: Capital asset turnover ratio: 2

What is the forecasted value of property, plan and equipment (PP&E) based on the following information: Capital asset turnover ratio: 2

Subject:FinancePrice:2.87 Bought7

What is the forecasted value of property, plan and equipment (PP&E) based on the following information:

  • Capital asset turnover ratio: 2.5
  • Forecasted revenues: $120
  • Forecasted costs of goods sold: $80

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

Answer:

GIVEN : Capital assets turnover ratio = 2.5

but , the formula for calculating, capital asset turnover ratio = net sales / fixed assets

( here, fixed asset = property ,plant & equipment -PP&E ; net sales= net revenue )

therefore, by substituting values from the given question, we get,

2.5 = 120 / value of PP&E

value of PP&E = 120 / 2.5

=$ 48

Sitejabber (5.0)

Merchant Circle (4.8)

Trustpilot (4.6)

Study Help Me (4.9)

Related Questions