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Capital Intensity Ratio

Explain why the following statement is False: If a company's capital intensity ratio (A*/S0) decreases as sales increase, use of the AFN formula is likely to understate the amount of additional funds required, other things held constant.

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Capital Intensity Ratio

Explain why the following statement is False: If a company's capital intensity ratio (A*/S0) decreases as sales increase, use of the AFN formula is likely to understate the amount of additional funds required, other things held constant.

AFN is Additional funds needed by an organization in the case of expansion. As per csub, "Additional funds needed (AFN) are those funds required from external sources to increase the firm's assets to ...

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Solution discusses Capital Intensity Ratio

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