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A common metric for evaluating inventory management is the Inventory Turnover ratio which is often calculated as Cost of Goods Sold divided by Average Inventory.

A common metric for evaluating inventory management is the Inventory Turnover ratio which is often calculated as Cost of Goods Sold divided by Average Inventory. One of US Steels main competitors is Nucor who uses FIFO. Briefly (in one or two sentences), describe the difficulties in comparing a LIFO firm to a FIFO firm using Inventory Turnover when costs are increasing. (4 points)

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