Suppose that two hospitals are identical in all ways except that Hospital N is r

Question

Suppose that two hospitals are identical in all ways except that Hospital N is relatively new while Hospital O is relatively old. Which of the following statements about a comparative financial statement analysis is most correct? (Hint: Think about the differences in the amount of net fixed assets [net plant and equipment] carried on the balance sheet and the amount of depreciation expense reported on the income statement.)

a. Hospital N will report higher net income.

b. Hospital N will have higher total-asset turnover.

c. Hospital N will have higher fixed-asset turnover.

d. Hospital N will have lower gross fixed assets.

e. None of the above statements is correct.

I know this has already been asked but there are conflicting answers between E and D!

Explanation / Answer

e. None of the above statements is correct.

So,

Remaining four are incorrect.

D. is not correct answer.

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