If All Things Are Equal,except One Company Uses LIFO During

question 124

Multiple Choice

If all things are equal,except one company uses LIFO during inflation and the other uses FIFO,then:

• A)The LIFO company will have a higher inventory turnover.
• B)The FIFO company will have a higher inventory turnover.
• C)The two companies will have the same inventory turnover.
• D)The two companies will rely upon an industry inventory turnover measurement.

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Definitions:

Cash Inflows

Money or other forms of capital coming into a business, often from sales, investments, or financing activities.

Required Rate

The minimum annual percentage return on investment demanded by investors or lenders.

Payback Period

The duration required for an investment to produce income or cash flows equal to the investment's initial cost.

After-tax Cash Flows

The net cash that remains after all tax-related expenses are deducted, often considered in investment analysis to gauge true profitability.