n Case ofitability rent inventory tion methode Suppose you are considering investing in two boom , Tiger Woods Enter and Phil Mickelson Systems. The two companies are virtually identical, and began operations at the beginning of the current year. During the year, each pany purchased Inventory as follows: AU 10,000 units at $-$ 40,000 5,000 units at $ 25,000 7,000 units at 6 42,000 1 0,000 units st 7. 70.000 32.000 $177.000 27 Nov Totals During the first year, both companies sold 25.000 units of inventory In early January, both companits purchased equipment costing $143,000 (10- estimated useful life and a $20,000 residual value). Woods uses the investory depreciation methods that maximize reported income (FIFO and straight-linel. contrast, Mickelson uses the inventory and depreciation methods that minima income taxes (LIFO and double-declining-balance). Both companies' trial baland at December 31 included the following: ............ $270,000 Sales revenue. Operating expen- $0,700 Requirements 1. Prepare both 4 r n Ip. 346) 2. Writt an investment Better Te r esa the following questions for your clien Which company appears to be more profitable? Which company has me cash to invest in new projects which company would you prefer to invest Whypp. 320-321 r estment Better INVESTMENT LETTER To D . Frode Subject Sectry Tiger Thi ment Phi Meheii hical Issue W indah L AHAT SH