In a Period of Rising Costs,the Last-In,first-Out (LIFO)method Results in a Lower

question 160

True/False

In a period of rising costs,the last-in,first-out (LIFO)method results in a lower cost of goods sold and a higher net income than the first-in,first-out (FIFO)method.

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Definitions:

Plowback Ratio

The proportion of earnings that a company reinvests in its business rather than distributing to shareholders.

Debt-equity Ratio

A ratio illustrating the division of asset financing between shareholder equity and company debt.

Dividend Payout Ratio

The fraction of net income a firm pays to its shareholders in dividends, typically expressed as a percentage.