Problem 5-3 evaluation of inventory costing methods users of financial statements rely on the information available to them to decide whether to invest in a company or lend it money. as an investor, you are comparing three companies in the same industry. the cost to purchase inventory is rising in the industry. assume that all expenses incurred by the three companies are the same except for cost of goods sold. the companies use the following methods to value ending inventory: company a—weighted average cost company b—first-in, first-out (fifo) company c—last-in, first-out (lifo) required 1. which of the three companies will report the highest net income? explain your answer. 2. which of the three companies will pay the least in income taxes? explain your answer. 3. which method of inventory costing do you believe is superior to the others in providing information to potential investors? explain. 4. explain how your answers to parts (1), (2), and (3) would change if the costs to purchase inventory had been falling instead of rising.

When paul o’neill joined alcoa as ceo, he set a , that there would be zero workplace accidents. a lot of people in the organization thought this was impossible given how dangerous some aluminum-manufacturing jobs are, but alcoa’s safety record improved tremendously. as the board of governors of the american red cross considers planning, one option is to make strategic plans and then direct managers to align tactical and operational plans accordingly. another option is to have planning specialists managers across the organization make their own plans. why might this organization’s executives opt for the latter approach? check all that apply. (a) the environment is a dynamic one, and department and frontline managers can come up with more responsive plans than can central leadership. (b)resources will be better coordinated across the organization in support of the overall strategy.(c) senior leadership will have more control over the organization’s direction. (d)when managers come up with their own plans, they are likely to be more committed to following through on them.