Assume two identical (hypothetical) company's, CAP inc. and NOW inc. (NOW), start with 1,000 cash and 1,000 common stock. Each year the companies recognize total revenues of 1500 cash and make cash expenditures of 500 (excluding an equipment purchase). At the beginning of operations, each company pays 900 to purchase equipment. CAP estimates the equipment will have a useful life of three years and an estimated salvage value of 0 at the end of the three years. Now estimates a much shorter useful life and expenses the equipment immediately. The companies have other assets and make no other asset purchases during the three-year period. Assume the companies pay no dividends, earn zero interest on cash balances, have a tax rate of 10 percent, and use the same accounting method for financial and tax purposes.

1. which company reports higher net income during the first year, second year, and third year?

2.Which company reports higher cash from operations for each of the three years?

if anything formulas to know how to solve it.