The Capital Intensity Ratio Is the Amount of Assets Required

question 22

True/False

The capital intensity ratio is the amount of assets required per dollar of sales and it has a major impact on a firm's capital requirements.

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Definitions:

Stand-Alone Basis

refers to evaluating an investment or project on its own merits without considering its interaction with other investments or projects.

Fixed Costs

Invariable expenditures that remain steady irrespective of the quantity of output or sales achieved, including tenancy charges, payroll, and insurance outlays.

Operating Cash Flow

The total money yielded from a company's standard business operations.

Net Income

The resulting earnings of a business after deducting all expenses and taxes from its total revenue.