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Q 18 3 points) Assume you are investing in a company. Would you prefer that this company use LIFO or FIFO for valuing its inv
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When the prices are rising, the company should use LIFO for valuing its inventory. Under LIFO method, cost of the most recently purchased inventory is included in the cost of goods sold. Therefore, when the prices are rising the company would be able to report a higher cost of goods sold and as a result a lower gross profit and net income. Thus, by using LIFO at times when prices are rising, the company would be able to report less net income and save money by paying less income tax.  

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