You are analyzing two companies that operate in the same industry. They are both growing capital-intensive manufacturing companies, Guerr Corp. and Filk Corp. A diligent reading of their annual reports reveals the following:

	Depreciation Method	Average Depreciable Life	Leases
Guerr Corp.	Straight line	Machinery: 10 years	Significant operating leases for machines extending up to 20 years in length
Filk Corp.	Double declining balance	Machinery: 20 years	All leases are capital leases

You know that these accounting differences will affect the comparability of the two companys financial results. Consider each of the above items (depreciation method, average depreciable lives, and leases) separately and determine all other things being equal, whether the following ratios will be higher or lower for Guerr when compared to Filk. Explain your answers.

i. Observed P/E ratio

ii. Price to Free Cash Flow

iii. Price to Book Value