The inventory costing method a company chooses can affect the financial statements and thus the decisions of the people who are using those statements.

Company A uses the LIFO inventory method and discloses its use of the LIFO method in the Notes to the Financial Statements. Company B uses the FIFO method to account for its inventory. Company B does NOT disclose which inventory method it uses. Company B reports a higher net income than Company A. In which company would you prefer to invest? Give your reasons. (For example, how do these methods affect the financial statements and what are the tax implications.)