Generally, fixed assets only vary directly with sales when the firm:

A) Maintains a constant retention ratio.
B) Projects a sales increase of 10% or more.
C) Issues new equity.
D) Is operating at full capacity.
E) Reaches the sustainable level of growth.

Fixed Assets

Assets that are of a permanent or long-term nature, typically used in the operations of a business, such as buildings, machinery, and equipment.

Full Capacity

The maximum level of output that a company can sustain within a given period, utilizing all available resources efficiently.