A common-size income statement expresses depreciation as 5.2 percent. This means that depreciation represents 5.2 percent of

A taxable earnings.

B sales.

C total assets.

D total owners' equity.

E net income.

Assume Castillo Corp. increases its operating efficiency such that costs decrease while sales remain constant. As a result, given all else constant, the

A profit margin will decline.

B return on equity will increase.

C equity multiplier will decrease.

D total asset turnover will increase.

E return on assets will decrease.