First Communications Group Is a Communication Services Firm Whose Employees

question 48

Multiple Choice

First Communications Group is a communication services firm whose employees provide advertising, market research, public relations, and other services world-wide.Other than relatively small amounts of equipment, it owns virtually no property, plant, and equipment (it leases most of its office space) .Which of the following is/are true?

• A)First Communications Group has a low fixed asset intensity.
• B)First Communications Group has a low debt-equity ratio.
• C)First Communications Group creates value from employees' services, not from operating assets, so there is neither the need nor the ability to borrow long-term using property, plant, and equipment as collateral.
• D)all of the above are true
• E)none of the above

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