Godinho Corp. could have achieved $525 million in sales if it had operated at full capacity. The calculation is based on their current sales of $420 million at 80% capacity.
The student has asked how large sales could have been if Godinho Corp. had operated its fixed assets at full capacity, given that it had $420 million in sales while operating at 80% of capacity. To find the sales at full capacity, you can set up a proportion where $420 million corresponds to 80% capacity. This gives us:
$420 million / 0.80 = $525 million
Thus, if the company had operated at full capacity, sales could have been $525 million. Therefore, the correct answer is (d) $525.0 million.