Which One of the Following Statements Is Correct Concerning the Capital

question 55

Multiple Choice

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

• A) The capital intensity ratio is the reciprocal of the total asset turnover ratio.
• B) The capital intensity ratio provides the amount of sales generated for each $1 in total assets.
• C) The higher the capital intensity ratio, the less emphasis the firm puts on capital.
• D) The capital intensity ratio is used to compute the internal rate of growth.
• E) The capital intensity ratio relates the amount of current assets to long-term assets.