Which One of the Following Statements Concerning the Capital Intensity

Multiple Choice

Which one of the following statements concerning the capital intensity ratio is correct?

A) The capital intensity ratio is equal to sales divided by net fixed assets.
B) The lower the capital intensity ratio, the greater the capital intensity level of the firm.
C) The capital intensity ratio is equal to one minus the total asset turnover ratio.
D) The capital intensity ratio is based on the degree of financial leverage employed by a firm.
E) The capital intensity ratio tells the amount of total assets needed to generate each dollar of sales.