SPM WII Ig Inventory ($ millions). Inventories Most inventories owned by Deere & Company and its United States equipment subsidiaries are valued at cost, on the "last-in, first-out" (LIFO) basis. Remaining inventories are generally valued at the lower of cost, on the "first-in, first-out" (FIFO) basis, or market. The value of gross inventories on the LIFO basis represented 61 percent of worldwide gross inventories at FIFO value on October 31, 2016 and 2015, respectively. If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 31 in millions of dollars would have been as follows: 2016 2015 Raw materials and supplies $ 716 $ 589 Work-in-process 425 408 Finished machine and parts 2,126 2,004 Total FIFO value 3,267 3,001 Less adjustment to LIFO value 1,132 1,002 Inventories $2,135 $1,999 We notice that not all of Deere's inventories are reported using the same inventory costing method (companies can use different inventory costing methods for different inventory pools). What effect has the use of LIFO inventory costing had on Deere's tax liability for 2016 only (assume a 35% income tax rate)? a. $396 million tax savings b. $45.5 million tax savings C. $130 million tax savings d. $85 million tax savings