Assuming flat year-over-year sales in a declining price envi...
Assuming flat year-over-year sales in a declining price environment under U.S.GAAP, a firm might expect cash flow from operations (CFO) and working capital (WC) under the LIFO (rather than FIFO) inventory method to be:A.Lower for both CFO and WC.B.Lower for CFO and higher for WC.C.Higher for CFO and lower for WC.
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Ans:B.
Under U.S来自.GAAP, in a declining price enviro360问答nment, LIFO 密往results in a lower COGS, a high议胶价免密能er gross profit margin, and higher taxable income.Higher 马封手掉taxable income r比向女吸位esults in higher tax outflows and lower after-tax cash flows fr初om operations (CFO).In the declining p环段脱史群盟精绿都训均rice environment, inventory balances and working capital re谈调菜约运flect the hi振gher cost of the earlier, lower priced inventory.
