The only difference between Joe's and Moe's is that Joe's has old, fully depreciated equipment. Moe's just purchased all new equipment which will be depreciated over eight years. Assuming all else equal:
A. Joe's will have a lower profit margin.
B. Joe's will have a lower return on equity.
C. Moe's will have a higher net income.
D. Moe's will have a lower profit margin.
E. Moe's will have a higher return on assets.
Answer: D. Moe's will have a lower profit margin.
Business
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