Question
Please use the following information to answer the next question. For DD Incorporated: Cash flows from assets = 300 dollars EBIT (from 1999 INCOME STATEMENT)
Please use the following information to answer the next question.
For DD Incorporated:
Cash flows from assets = 300 dollars
EBIT (from 1999 INCOME STATEMENT) = 100 dollars
depreciation expense (from 1999 INCOME STATEMENT ) = 20 dollars
taxes (from 1999 INCOME STATEMENT ) = 40
net fixed assets from BALANCE SHEET dated December 31, 1998 = 1400 dollars
net fixed assets from BALANCE SHEET dated December 31, 1999 = 1160 dollars
Additions to (Changes in) NWC for 1999 = 0 dollars
For EE Incorporated:
Cash flows from assets = 300 dollars
EBIT (from 1999 INCOME STATEMENT) = 40 dollars
depreciation expense (from 1999 INCOME STATEMENT ) = 0 dollars
taxes (from 1999 INCOME STATEMENT ) = 20
net fixed assets from BALANCE SHEET dated December 31, 1998 = 1400 dollars
net fixed assets from BALANCE SHEET dated December 31, 1999 = 1120 dollars
Additions to (Changes in) NWC for 1999 = 0 dollars
For FF Incorporated:
Cash flows from assets = 300 dollars
EBIT (from 1999 INCOME STATEMENT) = 300 dollars
depreciation expense (from 1999 INCOME STATEMENT ) = 40 dollars
taxes (from 1999 INCOME STATEMENT ) = 40
net fixed assets from BALANCE SHEET dated December 31, 1998 = 1400 dollars
net fixed assets from BALANCE SHEET dated December 31, 1999 = 1360 dollars
Additions to (Changes in) NWC for 1999 = 0 dollars
Based only on the numbers provided, which company is doing the best ? In other words, if you were an individual investor, in which company would you invest?
A. DD INCORPORATED
B. EE INCORPORTATED.
C. FF INCORPORATED
D. You are indifferent between EE INCORPORATED and FF INCORPORATED
E. You are indifferent amongst DD INCORPORATED, EE INCORPORTATED, and FF INCORPORATED because Cash flows from assets is 300 dollars for all three
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