• Explain which of the three methods (FIFO, LIFO, or average cost) would result in the highest value of the gross profit for a company that operates in an inflationary economy.
• Explain which of the three methods (FIFO, LIFO, or average cost) would result in the highest value of the net income for a company that operates in an inflationary economy.
• Explain which of the three methods (FIFO, LIFO, or average cost) would result in the highest value of the the cost of goods sold (COGS) for a company that operates in an inflationary economy.
• Explain which of the three methods (FIFO, LIFO, or average cost) would result in the highest value of the tax expense for a company that operates in an inflationary economy.
• Discuss which inventory valuation method you would select for a small business operating in the United States?