If a viable firm is not growing but is expected to continue over time,then we would expect capital expenditures to be equal to:
A)sales.
B)depreciation.
C)EBIT.
D)taxes payable.

Question

Quizplus · Accepted Answer

When a viable firm is not growing but is expected to continue, it is likely to invest in capital assets that would eventually require replacement. Therefore, the capital expenditures of the firm would be similar to its depreciation expense. Hence, the correct choice is B.

If a Viable Firm Is Not Growing but Is Expected