Suppose a new company is trying to decide whether to use LIFO or FIFO in a period of rising inventory costs. The CFO suggests using LIFO because it will give a higher inventory turnover ratio. Is he correct?

a. Yes, the average inventory will be lower (the ratio's denominator) and the cost of goods sold (the ratio's numerator) will be higher than if FIFO were used.

b. No, the average inventory would be the same because purchases are the same no matter which inventory method is chosen.

c. The inventory method has no effect on the inventory turnover ratio.

d. Without specific inventory amounts, it is not possible to predict the effect of the inventory method.