Baugh Company manufactures a single product for the military. Baugh Company had steady work, but it only had a return on investment of $6$ percent.The CEO of Baugh Company did a test flight of Baugh's product, and subsequently had a heart attack and died. The Board of Directors hired a new CEO of the company. The Board of Directors had been disappointed for many years at the meager $6$ percent rate of return. The Board of Directors offered the new CEO a substantial bonus if he raised the return on investment to $10$ percent.The new CEO went about his task of raising the return on investment. It turned out to be easier than he ever imagined. By installing a new standard cost system, he substantially improved efficiencies in the operations of the company. He made remarkable progress in turning a company around. In fact, the new CEO anticipated a return on investment of $15$ percent for the ear.This created a dilemma for the new CEO. The board had promised a bonus if he reached the $10$ percent threshold, but no additional bonus if he exceeded the $10$ percent threshold. He discovered that if he deferred some revenue until next year, and prepay some of next year's expenses, he would achieve a return on investment of $11$ percent. $($The company should have debited a prepaid expenses account, but they debited expenses instead.$)$ He justified this action by saying he was "saving for a rainy day."Before the end of the year, he renegotiated his contract with the Board of Directors, which specified additional bonuses if he exceeded the $10$ percent return on investment.QUESTIONS:Why would the new CEO want to defer some revenue and prepay some expenses? Is this ethical?