The most common motive for adding fixed assets to the firm is
A) expansion.
B) replacement.
C) renewal.
D) transformation.

Question

Quizplus · Accepted Answer

The most common motive for adding fixed assets to a firm is expansion, which refers to the growth of the company's operations, market share, or capacity. This can involve investing in new facilities, equipment, or technology to support increased production, sales, or innovation. Replacement, renewal, and transformation are also valid reasons for adding fixed assets, but they are less common or specific to certain situations. Replacement refers to the need to replace existing assets that have reached the end of their useful life or become obsolete. Renewal refers to the need to perform maintenance or upgrades on existing assets to keep them functioning properly or improve their performance. Transformation refers to the need to radically change the nature or purpose of the firm's assets to pursue new opportunities or respond to changing market conditions.

The Most Common Motive for Adding Fixed Assets to the Firm