Final answer:
It is true that asset growth in plant, property, and equipment can lead to future sales growth. This is because firms invest in these assets to expand capacity and meet future demand, anticipating that the investments will generate profits.
Step-by-step explanation:
For some types of assets, such as plant, property, and equipment, it is true that asset growth typically leads to future sales growth. Businesses invest in new equipment and structures during economic expansions, with the expectation that these investments will generate profits in the subsequent years. Significant investments in such tangible assets indicate that a firm is expanding its capacity to meet anticipated demand, hence potentially increasing its future sales.
The acquisition of new machinery, the construction of new facilities, or the initiation of research and development projects are all examples of firms spending money with the expectation of future returns. By investing $1.4 trillion even in a sluggish economy, as seen in the U.S. in 2009, companies strategically position themselves for profit generation.