Why Would High Technology fiRms Probably Choose FIFO as Their

question 7

Multiple Choice

Why would high technology firms probably choose FIFO as their inventory valuation method?

• A) FIFO would cause reported earnings to be higher.
• B) FIFO would cause reported earnings to be lower due to the deflationary nature of its ending inventory causing taxes to also be lower.
• C) FIFO would ensure that inventory would not become obsolete.
• D) FIFO is the easiest method to use.

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