The only difference between Firm X and Firm Y is that Firm X has old, fully depreciated equipment, while Firm Y has purchased all new equipment that will be depreciated over eight years. Assuming all else equal,

Multiple Choice

Firm Y will have a higher return on assets.

Firm Y will have a lower profit margin.

Firm X will have a lower profit margin.

Firm X will have a lower return on equity.

Firm Y will have a higher net income.