Fixed Assets Are Often Estimated Incorrectly by the Percent of Sales

Fixed assets are often estimated incorrectly by the percent of sales method because

A) fixed assets remain constant and the percent of sales method assumes all assets increase proportionally with sales.
B) fixed asset are very expensive.
C) fixed assets are typically purchased in "lumps" and therefore do not increase proportionally with sales.
D) fixed assets are part of the capital budgeting process.

Correct Answer:

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