I believe that Daniels is responsible for reporting the error to Peter. From the ethical reasoning perspective, I would attempt to identify the harms and benefits of whether informing my superior about potential error versus not informing them. The consequences of not reporting his mistake to Peter in projecting sales would be severe, not only for Daniels but also for entire Lynchberg Manufacturing. First, if the demand does not increase beyond the projected level later, Daniel would lose his job, and both Daniels and the company are going to involve themselves in a possible lawsuit. Besides that, regulators might investigate the failure of preparing an effective budget which probably lead to declines in net income. More important, both Daniel and the company are taking the risk of losing their reputations, which would cause the investors and creditors to lose the confidence in Lynchberg Manufacturing thus significantly affect its financing capability. Also, other stakeholders affected by his silence include employees in the accounting department who might underestimate the cost of each product, the management who might make unreasonable business decisions, suppliers who might face a dramatic sales return in raw material, and creditors who figure out the inaccurate debt repayment ratio. The primary benefit for Daniels is the acceptance from his boss and his job security in the short run. On the contrary, the consequence of reporting his mistake to Peter would cause Daniel to be criticized or severely, to be fired. Still, Daniels should act in accordance with the moral rule that honesty requires not only truth telling but disclosing all the information that another party has a right to know, even if his error is likely to affect