1. For its fiscal year- end, Calvan Water Corporation (CWC) reported net income of $12 million and a weighted average of 2,000,000 common shares outstanding. The company paid $800,000 in preferred dividends and had 100,000 options outstanding with an average exercise price of $20. CWCs market price over the year averaged $25 per share. What is CWCs diluted EPS under:

1. US GAAP
2. IFRS
4. Andrew Potter is comparing the cash- flow- generating ability of Microsoft with that of Apple Inc. He collects information from the companies annual reports and prepares the following table.

Cash Flow from Operating Activities

as a Percentage of Total Net Revenue

2017 (%) 2016 (%) 2015 (%)

Microsoft 43.9 39.1 31.7

Apple Inc. 27.7 30.5 34.8

As a Percentage of Average Total Assets

2017 (%) 2016 (%) 2015 (%)

Microsoft 18.2 18.1 17.1

Apple Inc. 18.2 21.5 31.1

What is Potter likely to conclude about the relative cash- flow- generating ability of these two companies?