Chapter 12, Problem 3MC

Summary Introduction

Case summary:

The company H’s price of stock is lagging its industrial averages. So that the board of directors of the company are decided to change the CEO of the company. The company posted person A as a new CEO. After the posting of person X in the company the financial forecast become improved. He is always comparing company H’s financial ratios to the industrial averages. Then it helps to improve the situations.

To discuss: Capital intensity, the manner in which decline in capital intensity effect the AFN, economies of scale joint with the rapid growth impact capital intensity, the manner in which alteration in each of the following impacts AFN.