A business is experiencing increasing costs for its stock over time - HSC - SSCE Business Studies - Question 18 - 2013 - Paper 1

To maximize profit in a scenario where stock costs are continuously increasing, the optimal inventory valuation method is 'First-in-first-out' (FIFO). This approach allows a business to sell older stock first, which is typically associated with lower costs than newer stock. Thus, recognizing lower costs as revenue increases, it results in higher profit margins during times of rising prices.

In contrast, methods like 'Last-in-first-out' (LIFO) could lead to higher reported costs and lower profits, while 'Just-in-case' strategies may incur unnecessary holding costs. 'Just-in-time' methods, although efficient, may not take advantage of existing stock cost advantages to maximize profits. Therefore, the best choice is (A) First-in-first-out.