Haltata Turf& Sod currently uses the first in, first out (FIFO) method to account for inventory. Due to significant tax-loss carryforwards, the company has a tax rate of zero. Currently prices are rising and inventory is stable or increasing. If the company were to use last in, first out (LIFO) instead of FIFO : ()
A. net income would be lower, and cash flows would be higher.
B. cash flow would remain the same, and working capital would decrease.
C. gross margin would increase, and average stockholder’ s equity would decrease.