a | ROI under FIFO | ||||
ROI = Net income/Average assets*100 | |||||
ROI = 211,098/1,421,970*100 | |||||
ROI = 14.8% | |||||
ROI under LIFO | |||||
Net income under LIFO = 211,098-38,280 | |||||
Net income under LIFO = 172,818 | |||||
Average assets under LIFO = 1,421,970-45,000 | |||||
Average assets under LIFO = 1,376,970 | |||||
ROI = 172,818/1,376,970*100 | |||||
ROI = 12.6% | |||||
Hence, | FIFO | LIFO | |||
ROI | 14.8 | % | 12.6 | % | |
b | ROI under FIFO | ||||
ROI = 265,458/1,699,430*100 | |||||
ROI = 15.6% | |||||
ROI under LIFO | |||||
ROI = (265,458+19,034)/(1,699,430-42,320) | |||||
ROI = 17.2% | |||||
Hence, | FIFO | LIFO | |||
ROI | 15.6 | % | 17.2 | % |
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