You Are an Independent CPA and Have Just Acquired a New

question 38

Essay

You are an independent CPA and have just acquired a new client,Lambert Manufacturing Company.The president of the company recently read an article advising a firm's management team to seek to maximize the long-run value of the firm's stock.The article mentioned profit maximization,earnings per share,and the role of these two factors in stock price maximization.The president wants your advice on how the choice of inventory cost flow methods (e.g.,FIFO vs.LIFO)relates to profit maximization,earnings per share,and stock price maximization.

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