A company which complains that although their income is quite satisfactory, cash is not available for dividends because of the high cost of replacing fixed assets in operating in an economic environment where:

Question

Quizplus · Accepted Answer

When expenditures required to replace long-lived assets are greater than depreciation expense, it indicates that the cost of replacing these assets is higher than the amount being set aside through depreciation, leading to cash flow issues despite satisfactory income.

A Company Which Complains That Although Their Income Is Quite