What might a company do to inflate its earnings according to discretionary management decisions?

A company might choose to increase share repurchase activities as a way to inflate its earnings per share (EPS). When a company buys back its own shares from the market, it reduces the number of shares outstanding. Since earnings are divided by the number of shares to calculate EPS, a reduction in shares increases the EPS, even if the actual earnings have not changed. This strategy can create an appearance of improved financial performance, which might appeal to investors and analysts looking for growth in earnings metrics.

The other options do not effectively contribute to inflating earnings in the same manner. Lowering product pricing could lead to increased sales volume but may also reduce overall revenue and profitability, which would not support inflated earnings. Writing off excess inventory might be necessary for accounting adjustments but would not improve earnings; instead, it typically results in a loss. Simplifying accounting policies could potentially streamline processes, but it does not inherently inflate earnings unless the changes manipulate how earnings are reported.