Suppose that two hospitals are identical in all ways except that Hospital N is relatively new while Hospital O is relatively old. Which of the following statements about a comparative financial statement analysis is most correct? (Hint: Think about the differences in the amount of net fixed assets [net plant and equipment] carried on the balance sheet and the amount of depreciation expense reported on the income statement.)
1) Hospital N will report higher net income.
2) Hospital N will have higher total-asset turnover.
3) Hospital N will have higher fixed-asset turnover.
4) Hospital N will have lower gross fixed assets.
5) None of the above statements is correct.