Ralph and Teresa, two calendar year taxpayers, are starting a new manufacturing business. They intend to incorporate the business with $600,000 of their own capital and 42 million of equity capital obtained from other investors. The company expects to incur organizational and startup expenditures of4100,000 in the first year. Inventories are a material income-producing factor. The Company also expe3cts to incur losses of $500,000 in the first two years of operations and substantial research and development expenses during the first three years. The company expects to break even in the third year and be profitable at the end of the fourth year, even though the nature of the business will continually require research and development activities. What accounting methods and tax elections must Ralph and Teresa consider in their first year of operations? For each method and election, explain the possible alternatives and the advantages and disadvantages of each alternative.