Daniel Company uses a periodic inventory system. Data for the current year: beginning merchandise inventory (ending inventory December 31, prior year), 2,060 units at $36; purchases, 7,860 units at $38; expenses (excluding income taxes), $193,200; ending inventory per physical count at December 31, current year, 1,720 units; sales, 8,200 units; sales price per unit, $75; and average income tax rate, 34 percent.

2. Between FIFO and LIFO, which method is preferable in terms of (a) net income and (b) income taxes paid (cash flow)?