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Financial Accounting

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Inventory Costing - Rising Prices - Highest Cash

FINACT-LE1PG1

Velvety Smooth Chocolate Company sells high-end chocolate bars to upscale consumers.

In a rising cost environment, which inventory cost flow method would lead to the highest after-tax cash flows for the company?

A

FIFO

B

LIFO

C

Weighted-average

D

Specific identification

E

Cash flows would be the same under any of the above listed methods.