Question:
Rangoon Corp's sales last year were $400,000 and its year-end total assets were $300,000. The average firm in the industry has a total assets turnover of 2.5. The new CFO belives the firm has excess assets that can be sold so as to bring the TATO down to the industry average without affecting sales. By how much must the assets be reduced to bring the TATO to the industry average?