LIFO Liquidation Maytag Corporation reported 2002 pretax operating income of $359.495 million. Footnotes to Maytag's financial statements read: "Inventories are stated at the lower of cost or market. Inventory costs are primarily determined by the last-in, first-out (LIFO) method." The footnote showed that if the FIFO method of inventory accounting, which approximates current cost, had been used for all inventories, they would have been $86.094 million and $83.829 million higher than reported at December 31, 2002 and 2001, respectively.

1. Calculate the 2002 pretax income that Maytag would have reported if the FIFO inventory method had been used. 2. Suppose Maytag's income tax rate is 34%. What were Maytag's income taxes using LIFO? What would they have been if Maytag had used FIFO? 3. Was Maytag's use of LIFO a good choice from a tax perspective? What is the cumulative financial effect of the choice?