ZeChems, a chemical manufacturer, has approximately $0.68 in assets for every dollar in sales. According to asset intensity, for every $100 increase in sales, the firm would need about $100 of additional assets.

Question

Quizplus · Accepted Answer

Asset intensity is the ratio of assets to sales. If ZeChems has $0.68 in assets for every dollar in sales, it means they need $68 in assets for every $100 increase in sales, not $100.

ZeChems, a Chemical Manufacturer, Has Approximately $0