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Question - Two accountants were discussing the performance of a retail business that earned revenue of $1,000,000 by selling goods and services that it had acquired for $600,000.
A said "We can afford to pay a dividend of $400,000."
B said "We should consider the current cost of inventory before deciding on dividends."
Required -
1. Explain the perspectives of A and B, using financial and physical capital.
2. Briefly outline the two components of profit under current cost accounting.
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