To many a U.S. corporation, LIFO is a magic formula in times of inflation. It cuts their profits for tax purposes without taking a penny out of their coffers. Under LIFO—pronounced lie-fo and standing for "last in, first out"—the Government permits inventory to be figured by the cost of the last stock bought during the year, on the theory that it is the first to be sold. Thus the profit on an item costing $2 in January and $3 in December is figured on the basis of the higher cost, thus a lower tax. Though designed (in 1938) for industries...

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