All else the same, greater depreciation expense would likely be associated with a ﬁrm which has a
high capital intensity ratio, relative to other ﬁrms in the same industry.

Question

Quizplus · Accepted Answer

Capital intensity ratio measures the amount of capital invested in a firm relative to its sales. A high capital intensity ratio would mean that the firm has a lot of assets that require depreciation, which would result in greater depreciation expense. Therefore, greater depreciation expense would likely be associated with a firm which has a high capital intensity ratio.

All Else the Same, Greater Depreciation Expense Would Likely Be