9. Capacity Usage (LO4, CFA9) Which of the following is true regarding the full-capacity sales level of a firm?

a. A firm that is operating at less than full capacity will never need external financing.

b. For a firm that is operating at less than full capacity, fixed assets will typically increase at the same rate as sales.

c. A firm with excess capacity has room to expand without increasing its investment in fixed assets.

d. Only firms operating at full capacity can grow rapidly.

Use the following raw data to answer Questions 10–13:

Net income: $16 Depreciation/amortization: $4 Repurchase of outstanding common stock: $10 Issuance of new debt: $18 Sale of property: $12 Purchase of equipment: $14 Dividend payments: $4