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Lexis Corporation is considering changing its inventory method from weighted average cost to FIFO and wants to determine the impact on selected accounting ratios. In
Lexis Corporation is considering changing its inventory method from weighted average cost to FIFO and wants to determine the impact on selected accounting ratios. In general, what would be the impact of this change on the following ratios, assuming that prices have been increasing over time: net profit margin ratio, fixed asset turnover ratio, current ratio, and quick ratio? (Indicate the direction of the effect by selecting increase, decrease, no effect from the dropdown menu.)
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