83. The annual report of a company as at the end of its first year of its operation
contains the following data:
Common stock $0.50 par value – Authorized (2,500,000 shares) $ 1,250,000
– Issued (2,000,000 shares) $ 1,000,000
Additional paid-in-capital $10,000,000
Retained earnings $ 4,000,000
Current price per share $30
The company’s ending inventories using LIFO are valued at $1,500,000 and a
footnote to financial statements reports inventories valued using FIFO would be
$1,900,000. The company’s tax rate is 30 percent. The FIFO adjusted price-to-
book value of the company is closest to:
A. 3.93.
B. 4.00.
C. 4.08.
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