Two similar companies acquire substantial new production facilities, which they both will depreciate over a 10-year period. However, Company A uses accelerated depreciation while Company B uses straight-line depreciation. In the first year that the assets are depreciated, which of the following is most likely to occur?

a. A’s P/CF ratio will be higher than B’s.

b. A’s P/CF ratio will be lower than B’s.

c. A’s PE ratio will be higher than B’s.

d. A’s PE ratio will be lower than B’s.