Which of the following statements about the capital acquisitions ratio is correct?
A)A high ratio indicates less need for outside financing of property,plant and equipment.
B)The ratio is computed by dividing cash flow from operating activities by the average net property,plant,and equipment.
C)A low ratio may indicate a failure to update property,plant,and equipment,which can limit a company's ability to compete in the future.
D)The ratio is comparable across industries.

Question

Quizplus · Accepted Answer

A high capital acquisitions ratio suggests that a company can finance its property, plant, and equipment needs internally, reducing reliance on external financing.

Which of the Following Statements About the Capital Acquisitions Ratio