With Lumpy Assets,a Small Projected Increase in Sales Could Potentially

question 68

True/False

With lumpy assets,a small projected increase in sales could potentially mandate a significant increase in plant and equipment,which would lead to a very large financial requirement.

---

Definitions:

Equipment

Tangible property owned by a business that is used in its operations to generate income.

Working Capital

A measure of a company's short-term financial health and operational efficiency, calculated as current assets minus current liabilities.

Accrual

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash transaction happens.