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Cameron Bly is a sales manager for an automobile dealership. He earns a bonus each year based on revenue from the number of sold in

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Cameron Bly is a sales manager for an automobile dealership. He earns a bonus each year based on revenue from the number of sold in the year less warranty expenses. Actual warranty expenses have varied over the prior 10 years from a low of 3% of an automobile's selling price to a high of10%. In the past, Bly has tended to estimate warranty expenses on the high end to be conservative. He must work with the dealership's accountant at year-end to arrive at the warranty expense accrual for cars sold each year. Does the warranty accrual decision create any ethical dilemma for Bly? Since warranty expenses vary. what percent do you think Bly should choose for the current year? Justify your response

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