Inventory valuation methods are based on the systematic cash flow of adding and removing inventory costs. Each method has its advantages and disadvantages. When selecting an inventory method, management should select the method that best reflects operational needs.

Last in, first out (LIFO) and first in, first out (FIFO) are two of the inventory methods that we have discussed.

Assume that you are investing in a publicly traded company during a period of rising prices.

• Would you prefer that the company use LIFO or FIFO for inventory valuation? Please support your response.

Select 2 of your classmates' posts, and respond to them using 1 of the following prompts:

• Do you agree or disagree with the cost flow assumption selected by your peer?
• What alternatives exist for inventory valuation that you could suggest to your classmate?