You and your friend want to invest in shares of a public company. Your friend, who took an accounting course years ago but dropped out, offered to look at the financial statements of one company and e-mailed you the following about their findings: a. "The balance in accumulated depreciation is very large. I am not sure, but I think that accumulated depreciation is a savings account for future purchases of property and equipment. If I am correct and the company spends everything recorded in accumulated depreciation, they won't have any cash left." Is your friend correct in their understanding? (2 marks - 5 minutes) No It's wrong. Accumulated depreciation is an old property or equipment value in future company will sold the So the property or equipment, and get cash. b. "I looked online for the company's ratios and found that its profit margin for 2021 was 8.5% but only 6.0% in 2020. That means that the 2021 results were better as sales revenue must be growing, correct?" Has your friend interpreted the profit margin ratio correctly? (profit margin = net income/sales revenue) (2 marks 5 minutes) D