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20Y1 20Y2 20Y3 Sales $1,840,000 $1,920,000 $1,750,000 Net fixed assets $570,000 $620,000 $750,000 Sales/net fixed assets ratio 3.23 3.1 2.33 Assuming no revaluation of fixed

20Y1 20Y2 20Y3
Sales $1,840,000 $1,920,000 $1,750,000
Net fixed assets $570,000 $620,000 $750,000
Sales/net fixed assets ratio 3.23 3.1 2.33

Assuming no revaluation of fixed assets has occurred, which one of the following is the correct conclusion to draw from this trend?

A) the business has excess capacity and is not likely to need financing for new fixed assets.

B) the business has not depreciated its fixed assets according to accounting standards.

C) the business is adding to its fixed assets at about the same rate that its sales are growing.

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