hw0799

1. You need to value inventory at historical cost. Since the inventory was purchased evenly throughout the year, and based on FIFO, you MIGHT have inventory left from July-December (just a thought). So using the average rate would give a better picture than the current rate. That is how I think about it.
2. The ability to convert into cash will want me to use the current rate.
3. I would use the average one, following the same methodology in answer 1.