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Alpha Corporation owns only fully depreciated equipment. Beta Corporation owns only new equipment, which will be depreciated over ten years. If Alpha and Beta have
Alpha Corporation owns only fully depreciated equipment. Beta Corporation owns only new equipment, which will be depreciated over ten years. If Alpha and Beta have the same sales, costs, tax rate, and enterprise value, then:
Beta will have the higher net income.
Beta will have the lower EV multiple.
Alpha and Beta will have the same EV multiple.
Alpha will have the lower return on equity.
Alpha will have the lower net profit margin.
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