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10. Which one of the following will not increase return on investment? A) B) C) D) Variable costs are increased An increase in sales Average

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10. Which one of the following will not increase return on investment? A) B) C) D) Variable costs are increased An increase in sales Average operating assets are decreased Variable costs are decreased Use the following to answer question 11: Cleaners, Inc. is considering purchasing equipment costing $60,000 with a 6-year useful life. The equipment will provide cost savings of $14,600 and will be depreciated straight-line over its useful life with no salvage value. Cleaners requires a 10% rate of return. Present Value of an Annuity of 1 Period 8% 9% 10% 11% 12% 15% 6 4.623 4.486 4.355 4.231 4.111 3.784 11. What is the approximate profitability index associated with this equipment? A) 1.23 B) 1.03 C) 1.06 D) .73

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