Question 1. In 1995 Chrysler has a return on equity of 20 percent, whereas Ford's return is only 8 percent. Use the decomposed ROE framework to provide possible reasons for this difference.
Question 2. In a period of rising prices, how would the following ratios be affected by the accounting decision to select LIFO, rather than FIFO, for inventory valuation?
* Gross Margin
* Current Ratio
* Asset Turnover
* Debt-to-equity ratio
* Average tax rate