a. To what extent can revenue growth substitute for net income predict future earning power? Explain. Use efficient securities market concepts in your answer, and consider the requirement under GAAP for the immediate write-off of research and startup costs.

b. Use the concept of relevance to evaluate the revenue recognition policies of Imax, JetForm and Bid.Com have been outlined above.

c. Use the concept of reliability to evaluate the revenue recognition policies outlined above.

d. To the extent that investors are aware of the possible use of revenue recognition policies that overstate revenues (even though, for a specific firm, they may not know the extent to which that firm is overstating), what is the effect on the operation of the capital market? Explain. A good answer will draw on the concept of an information system