Question
Your company's fixed asset turnover is 30. The average fixed asset turnover ratio for all companies is 3. Assuming you own all your fixed assets,
Your company's fixed asset turnover is 30. The average fixed asset turnover ratio for all companies is 3. Assuming you own all your fixed assets, this likely means that:
A. If you want to increase your firm's revenues by $30 you must add $3 in assets.
B. The sustainable growth rate of your company will be lower than the average company, all else equal.
C. Your competitors lease their fixed assets.
D. The internal growth rate of your company will be higher than the average company, all else equal.
E. You're in an industry that requires very high start-up costs.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started