Answer: B. $430.80
Step-by-step explanation:
Given : Last year Baron Enterprises had $800 million of sales.
It had $270 million of fixed assets that were used at 65% (=0.65) of capacity last year.
Now, the used asset = [tex]0.65\times270=\$175.5[/tex]million
Now, Baron Enterprises had $800 million of sales in $175.5 million of assets , if we use all of $270 million of fixed assets , then the sales will be :-
[tex]\dfrac{800}{175.5}\times270=1230.76923077\approx1230.80\text{ million}[/tex]
Now, the increase in Baron's sales before it is required to increase its fixed assets = [tex]\$1230.80-$800=\$430.80\text{ millions}[/tex]
Hence, the increase in Baron's ( in million ) sales before it is required to increase its fixed assets = $430.80
