Question

You have the following data ($millions on three investor-owned hospitals that pay tax at a rate...

You have the following data ($millions on three investor-owned hospitals that pay tax at a rate of 40%.

Hospital A

Hospital B

Hospital C

Revenue

1000

1000

1000

Cost expect depreciation

700

600

500

Depreciation

100

200

300

Which statement about net cash flow is true?

  1. Hospital A has the greatest net cash flow.
  2. Hospital B has the greatest net cash flow.
  3. Hospital C has the greatest net cash flow.
  4. Hospital A and C have the same net cash flow.
  5. All three hospitals have the same net cash flow.
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