Companies with Relatively High Assets-To-Sales Ratios Require a Relatively Large

question 15

True/False

Companies with relatively high assets-to-sales ratios require a relatively large amount of new assets for any given increase in sales; hence, they have a greater need for external financing.There are currently no alternatives for these types of firms to lower their asset requirements.

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Definitions:

Production Cost

The total cost incurred by a firm in producing a specific quantity of a good or service, including both fixed and variable costs.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than its trade partners, leading to potential gains from trade.

Absolute Advantage

A condition where a country, company, or individual can produce a good or service more efficiently than another entity, using fewer resources.

Corn Laws

The tariffs, subsidies, and restrictions enacted by the British Parliament in the early nineteenth century to discourage imports and encourage exports of grain.