Question

Question 9 of 10

A business wants to maximize its tax savings in an economy with declining
costs. It should choose the
method.
A. LIFO
OB. weighted average
OC. gross profit
OD. FIFO
SUBMIT

Answer 1

A business should choose the FIFO method to maximize tax savings in an economy with declining costs.

Step-by-step explanation:

A business looking to maximize its tax savings in an economy with declining costs should choose the FIFO method. FIFO stands for First-In, First-Out, which means that the business will assume that items acquired first are sold or used first. This method is ideal in an economy with declining costs because it allows the business to save taxes by valuing inventory at the lower costs of the earlier purchases.

Learn more about Maximizing tax savings in an economy with declining costs