Which of the Following Would Not Be a Reasonable Conclusion

Multiple Choice

Which of the following would not be a reasonable conclusion when comparing LIFO-FIFO under an inflationary condition?

A) FIFO generally results in a lower profit than does LIFO.
B) FIFO reports a higher inventory ending balance.
C) LIFO results in a lower profit figure than does FIFO.
D) LIFO would probably be used for inventory that has a high turnover rate because there would be an immaterial difference in the results between LIFO ad FIFO.
E) The cash flow under LIFO is greater than the cash flow under FIFO by the difference in the resulting tax between the two methods.