When ﬁxed assets on a pro forma statement are projected to increase at a rate equivalent to the projected rate of sales growth, it can be assumed that the ﬁrm is:

Question

Quizplus · Accepted Answer

When fixed assets are projected to increase at the same rate as sales, it implies that the firm is currently operating at full capacity, as any increase in sales would require a proportional increase in fixed assets to support that growth.

When ﬁXed Assets on a Pro Forma Statement Are Projected