3) Provided below are excerpts from Ford's 2017 Annual Report. Use this information to answer all parts of question 3. NOTE 12. INVENTORIES All inventories are stated at the lower of cost and net realizable value. Cost for a substantial portion of U.S. inventories is determined on a last-in, first-out ("LIFO") basis. LIFO was used for 30% of total inventories at both December 31, 2016 and 2017. Cost of other inventories is determined by costing methods that approximate a first-in. first-out ("FIFO") basis. Inventories at December 31 were as follows (in millions): 2016 Raw materials, work-in-process, and supplies Finished products Total inventories under FIFO LIFO adjustment Total inventories 3,843 $ 5.943 9,786 (888) 8.898 $ 2017 4,397 6,779 11.176 (899) 10,277 2 FORD MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENT (in millions, except per share amounts) For the years onded December 31. 2015 2016 2017 Revenues Automotive Financial Services Other Total revenues (Note 4) 140,566 $ 8,992 141,546 $ 10,253 145,653 11,113 10 149,558 151,800 156,776 Costs and expenses Cost of sales Selling, administrative, and other expenses Financial Services interest, operating, and other expenses Total costs and expenses 124.446 10,763 7,368 142,577 126,183 10,972 8.904 146,059 131,332 11.527 9,104 151,963 773 894 Interest expense on Automotive debt 1,133 (269) 438 Non-Financial Services other income!(loss), net (Note 5) Financial Services other income/(loss), net (Note 5) Equity in net income of affiliated companies Income before income taxes Provision for Benefit from) income taxes (Note 7) Net income Less: Income/(Loss) attributable to non controlling interests Net income attributable to Ford Motor Company 1,854 372 1,818 10,252 2,881 7.371 (2) 7,373 $ 1,780 6,796 2.189 4.607 11 3,060 207 1.201 3,148 520 7,628 26 7,602 $ 4,596 5 a. (1pt) Assuming Ford has always paid a 30% income tax rate, how much has Ford saved over the life of the company by using LIFO for its inventory as of Dec 31, 2017? b. (1pt) What would Ford have reported as Income before income taxes in 2017 had they used FIFO for all their inventories