The following information is extracted from the draft financial statements of Company XYZ, a US-based manufacturing company, for the year ended 31 December 2020. The company is currently adopting First in, First out (FIFO) to record the inventory cost. All figures are in thousands except price per unit. S Sales revenue 54,000 EBIT 5,450 Interest expense 1,800 Profit after tax 2,555 Inventory as of 1 January 2020 (450 units@$100 per unit) 45,000 Inventory purchased in 2020 (150 units@$110 per unit) 16,500 Inventory sold in 2020 (400 units) Total assets as of 31 December 2020 8,300 The accountant recommends switching the inventory costing method from First in, First out (FIFO) to Last in, First Out (LIFO) for 2020 to better reflect the rising inventory cost during the year. At the moment, the company uses FIFO for income tax purposes. Upon switching over to LIFO, the company would need to use LIFO for income tax purposes. Additional information The manager's bonus plan is specified below: the manager will receive a bonus only if the company's ROA ratio (i.e., profit after tax over total assets) is between 0.3 and 0.5, and the higher ROA, the more bonus the manager will receive. The long-term debt agreement requires EBIT to be a minimum of 3 times of interest expense. REQUIRED: (a) Describe and quantify the effects of switching from FIFO to LIFO on the company's "profit after tax" for 2020 and "ending inventory" as of 31 December 2020. Assume Company XYZ has a tax rate of 30%. (3 marks) (b) Do you think the accountant's recommendation of switching the inventory costing method from FIFO to LIFO demonstrates the efficient contracting or opportunistic view of accounting's role in contracts? Briefly explain. (Maximum words: 80) (2 marks) (c) Do you think the manager would welcome the accountant's recommendation? Briefly explain and show your workings. Round your answer to 3 decimal places. (Maximum words: 200) (7 marks)