For a capital intensive, automated company the break-even point will tend to be higher and the margin of safety will be lower than for a less capital intensive company with the same sales.

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Malek Johnson · Accepted Answer

Final Answer : True, Explanation :  A capital intensive and automated company will have higher fixed costs due to the investment in capital and automation, leading to a higher break-even point. The margin of safety will also be lower as a greater portion of sales will be needed to cover these fixed costs before profits can be generated. In contrast, a less capital intensive company will have lower fixed costs and therefore a lower break-even point and higher margin of safety.

For a capital intensive, automated company the break-even point will tend to be higher and the margin of safety will be lower than for a less capital intensive company with the same sales.

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