- CFA Exams
- CFA Level I Exam
- Study Session 8. Financial Reporting and Analysis (3)
- Reading 25. Inventories
- Subject 6. Financial Analysis of Inventories
CFA Practice Question
Comparing with FIFO, LIFO results in (during periods of rising prices) ______.
A. higher taxes and lower cash flows
B. lower taxes and higher cash flows
C. lower taxes and lower cash flows
User Contributed Comments 4
| User | Comment |
|---|---|
| poomie83 | higher cashflows as less taxes are paid |
| meeravenk | Oh ... for a sec there I thought I lost it ... thanks poomie |
| maria15 | I got this wrong at first...I thought that you have lower tax because you have lower cash flows to begin with. |
| bablig | Tax will be compted on income nd not on cash flows. |