Which of the Following Statements About the Capital Acquisitions Ratio

question 101

Multiple Choice

Which of the following statements about the capital acquisitions ratio is correct?

• A)A high ratio indicates less need for outside financing of property,plant and equipment.
• B)The ratio is computed by dividing cash flow from operating activities by the average net property,plant,and equipment.
• C)A low ratio may indicate a failure to update property,plant,and equipment,which can limit a company's ability to compete in the future.
• D)The ratio is comparable across industries.

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Definitions:

Disposable Income

Available cash for households to utilize in saving and spending after income taxes have been processed.

Savings

Money that is set aside from income for future use, often stored in a bank or invested to generate returns.

Disposable Income

Households' spendable and savable funds following income tax deductions.

Autonomous C

Spending by consumers that does not depend on current income levels, such as basic needs or contractual obligations.