This may result in a further downward price pressure.” The downward price pressure could lead to…

The Industry and Business Risk excerpt states that, “Increased competition may lead to lower unit sales and excess production capacity and excess inventory. This may result in a further downward price pressure.” The downward price pressure could lead to inventory that is valued above current market prices or net realizable value. Any write-downs of inventory are least likely to have a significant effect on the inventory valued using:

A. weighted average cost.

B. first-in, first-out (FIFO).

C. last-in, first-out (LIFO).

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