Boeing and McDonnell Douglas were two leaders in the manufactures of aircraft. In the mid-1990s Boeing announced intentions to acquire McDonnell Douglas and create one huge corporation. Competitors, primarily Airbus of Europe, were very concerned that they would not be able to compete with such a huge rival. In addition, customers were concerned that this merger would reduce the number of suppliers to a point where Boeing would be able to dictate prices. Provided below are figures taken from the pre-merger financial statements of Boeing and McDonnell Douglas, which allow a comparison of the operations of the two corporations prior to their merger.

Instructions
(a) Which company used a longer average estimated useful life for its assets?
(b) Based on the asset turnover ratio, which company used its assets more effectively to generate sales?
(c) Which company generated a better return on assets?
(d) Besides an increase in size, what other factors might have motivated thismerger?

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S in millions) Total revenue Net income (loss) Total assets (average) Land (average) Buildings and fixtures Machinery and equipment Average property, plant, and equipment (at cost) Accumulated depreciation Boeing $19,515 393 22,098 404 5,791 7,251 13,744 7,288 976 McDonnell Douglas $14,322 (416) 10,466 91 1,647 2,161 3,899 2,541 196