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'Average useful life', 'Average age of PPE assets' and-(Answered)

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Question

'Average useful life?, ?Average age of PPE assets? and ?Asset Turnover? are three measures that decision makers can use to analyse the PPE (Property, Plant & Equipment) assets of entities. Fresh Food Ltd and Cheap Food Ltd operate in the same industry. Each entity depreciates its PPE (Property, Plant & Equipment) assets using the straight line approach. An investigation of their financial statements reveals the following information:

? (Amounts in millions)
? Fresh Food Ltd Cheap Food Ltd
Sales $ 22,653 $ 33,812
Total Assets (Average) 22,088 36,167
Accumulated Depreciation 2,701 4,359
Depreciation Expense 381 697
Cost of Plant Assets (Average) 7,715 10,237


Required:

What conclusion concerning the management of plant assets can be drawn from these data? ?(word limit: 180 ? 240 words)

 

Paper#9210718 | Written in 27-Jul-2016

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