duction: Some economists and policy experts have argued that there is a private sector investment bias and that investment from the U.S. Federal Government is unnecessarily handicapped due to its accounting procedures. 1. Describe in a brief paragraph the differences between the accounting procedures used in the private sector's income statement and the U.S. Federal Government's income statement. 2. Suppose a private company invests $100 million into a factory to increase their productive capacity and improve its competitiveness. The useful life of the factory is 20 years. Suppose that the company's revenues were $600 million and its non-investment expenses were $250 million in the year the investment was made. Calculate the company's surplus/deficit for the year using the "cash-basis" accounting method. (Provide the calculations) 3. Now calculate the company's surplus/deficit for the year given the information in part (B), but now use the "accrual" accounting method instead. (Provide the calculations) 4. Now given the differences in the surplus/deficit calculated in parts (B) and (C), why have some policy experts argued that there is a private sector investment bias and investment by the government is handicapped? (Provide at least 2 paragraphs for full credit) 5. Discuss the reasons for and against using capital budgeting (accrual accounting) for the U.S. Federal Government's budget