Dave has been suggested to assume his firm is operating at full capacity and its net fixed assets can be added by any amount. Thus, he makes its ____________________ in his construction of the pro forma balance sheet of the firm.

Multiple Choice

• net fixed assets vary proportionally with sales

• net fixed assets vary only if the firm is producing at less than full capacity

• net fixed assets vary only if the firm maintains a fixed debt-equity ratio

• net fixed assets remain fixed

• net fixed assets vary only if the firm is currently producing at full capacity