Which One of the Following Statements Concerning the Capital Intensity

question 30

Multiple Choice

Which one of the following statements concerning the capital intensity ratio is correct?

• A) The capital intensity ratio is equal to sales divided by net fixed assets.
• B) The lower the capital intensity ratio, the greater the capital intensity level of the firm.
• C) The capital intensity ratio is equal to one minus the total asset turnover ratio.
• D) The capital intensity ratio is based on the degree of financial leverage employed by a firm.
• E) The capital intensity ratio tells the amount of total assets needed to generate each dollar of sales.

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Definitions:

Defendant's Liability

The legal responsibility of the defendant in a legal proceeding to compensate for harm caused.

Product Liability Suit

A legal claim against a manufacturer or seller for producing or selling a defective product that caused harm to the consumer.

Negligence

The failure to exercise the level of care that a reasonably prudent person would under similar circumstances, resulting in harm.

Cause in Fact

A legal principle determining whether a defendant's actions are the actual cause of the plaintiff's injury.