Adding lumpy assets to a firm does not affect the financial requirements associated with an expansion because the annual costs associated with growth normally are fixed, no matter the level of sales.

Question

Quizplus · Accepted Answer

Adding lumpy assets, such as property or equipment, can increase the financial requirements associated with an expansion as it requires upfront investment and increases fixed costs such as depreciation and maintenance. Therefore, the statement is false.

Adding Lumpy Assets to a Firm Does Not Affect the Financial