Final answer:
To calculate the amount of new fixed assets required to support the growth in sales, you can use the formula for capital intensity ratio. By calculating this, you can find the amount of new fixed assets required.
Step-by-step explanation:
To calculate the amount of new fixed assets required to support the growth in sales, we can use the formula for capital intensity ratio. The formula is:
Capital intensity ratio = Fixed assets / Full-capacity sales
In this case, the current fixed assets are $703,000 and the projected sales are $843,000. To find the new fixed assets required, we can substitute these values into the formula:
New fixed assets = Capital intensity ratio x Projected sales
By calculating this, we can find the amount of new fixed assets required to support the growth in sales.