A. Assuming deflation of the inventory items, which of these inventory cost methods would probably produce a higher cash flow: FIFO or LIFO? Briefly explain.

B. Traditional ratio "Return on Assets" = (Net income to common stock.) / (Total assets) Alternative ratio "Return on Assets" = [(Net income + |(Interest expense) x (1-T)|] / (Total assets) Discuss the advantages of the alternative ROA vs. traditional ROA

Answer rating: 100% (QA)

A Inventory Cost Methods and Cash Flow 1 FIFO FirstInFirstOut Under FIFO the assumption is that the oldest inventory items are sold first Therefore du... View the full answer