Which of the Following Statements About the Capital Acquisitions Ratio

question 87

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 operations 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:

JIT Policies

Just-In-Time Policies; strategies aimed at minimizing inventory and reducing waste by receiving goods only as they are needed in the production process.

Setup Time

The duration required to prepare equipment or a process for production, affecting the efficiency of manufacturing operations and job scheduling.

Lot Size

The number of units of a product bought or sold in a single transaction.

Setup Cost

The expenses incurred when preparing equipment, machinery, or systems for a new production run or switching from producing one item to another.