Selected financial statement information relating to inventories for General Electric (GE) is given below.

1. Compute GE's number of days' sales in inventory for 2005 using
(a) The FIFO valuation for inventory and
(b) The LIFO valuation for inventory. Are the differences significant enough to concern you?
2. Suppose that GE purchases its inventory with the terms "net 30 days." That is, GE's creditors expect payment in 30 days. Is GE going to have a cash flow problem?

December 31 (in millions) 2005 2004 Cost of goods sold Inventory-FIFO valuation Inventory-LIFO valuation 11,171 10,474 $42,645 10,439 9,778