Question: Maxie Smith, a student who has had no accounting courses, is looking at the balance sheets of two companies in which he is thinking of investing. He remarks that both companies have the same amoount of equipment.. What are the pros and cons of investing in each company. Which company is the better investment?
Company A Company B
Equipment 1,130,000 900,000
Accumulated Depreciation (730,000) (500,000)
Book Value $400,000 $400,000