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Question
When a financial analyst adjusts a company's reported depreciation expense to improve comparisons of profitability with another firm that uses the same depreciation method, the analyst assumes all of the following to be true except that
A. the useful lives differences are "real".
B. the dollar breakdown within asset categories is similar for both firms (i.e., both have similar amounts of buildings vs. machinery, etc.).
C. salvage value proportions are roughly equivalent for both firms.
D. the useful life differences are artificial.
Answer
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