Order the answer to: In the previous problem, suppose the firm was operating at
||In the previous problem, suppose the firm was operating at only 80 percent capacity in 2015. What is EFN now? Capital intensity ratio = Fixed assets/Full-capacity sales = $1,800/$1,111 = 1.62 This means that Rosengarten needs $1.62 in fixed assets for every dollar in sales when it reaches full capacity. At the projected sales level of $1,250, it needs $1,250 × 1.62 5 $2,025 in fixed assets, which is $225 lower than our projection of $2,250 in fixed assets. So, EFN is only $565 – 225 = $340.