Respuesta :
Answer:
Forecasted value of property, plan and equipment (PP&E) is $48.
Explanation:
First note that Capital asset is the same thing as property, plan and equipment (PP&E).
In order to calculate this, we therefore use the formula for calculating the Capital asset turnover ratio which is the ratio of forecasted revenues to forecasted value of property, plan and equipment (PP&E) as follows:
Capital asset turnover = Forecasted revenues / Forecasted value of PP&E
Substituting for the values in the question into the equation above and solve for Forecasted value of PP&E, we have:
2.5 = 120 / Forecasted value of PP&E
Forecasted value of PP&E = 120 / 2.5 = $48
Therefore, the forecasted value of property, plan and equipment (PP&E) is $48.
The forecasted value of property, plan and equipment for the period for the statement quoted above is $48. The calculations can be implied by using the values given in the formula.
The value of the property, plan and equipment is important for estimating the current, short run and long run capital requirements of the firm for a given period using the ratios.
- The values given to us are as the capital assets turnover ratio is 2.5 and the forecasted costs of goods sold is $80 whereas the forecasted revenues of the firm is $120.
- The calculation of estimated property, plan and equipment of a firm can be calculated by using the formula as given below by putting the available values.
- [tex]\rm Forecasted\ PP\&E= \dfrac {Forecasted\ Revenues}{Capital\ Assets\ Turnover\ Ratio}\\\\\\\\\rm Forecasted\ PP\&E= \dfrac {\$120}{2.5}[/tex]
- We get the forecasted PP&E of the firm as below,
- [tex]\rm Forecasted\ PP\&E= \$48[/tex]
- Therefore the value obtained for the forecasted PP&E of the firm is $48.
Hence, the correct statement of the forecasted PP&E of the firm is $48 when the forecasted revenues are $120 and the assets turnover ratio stands at 2.5.
To know more about forecasted values, click the link below
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