Question

Collins machinery has used lifo inventory valuation for the past 10 years. over those 10 years, the prices of inventory have continued to increase. this would result in ________ reserve.

Answer 1

The fact that over the10 years, the prices of Collins machinery's inventory have continued to increase would result in Increasing the LIFO. 
According the LIFO method in a situation ijn which the prices of inventory continue to increase, the higher-costing inventory will be used first and the lower-costing inventory will be kept.  LIFO inventory will have increasingly lower value than FIFO inventory, which means increasing the LIFO reserve. 

Answer 2

Collins machinery has used lifo inventory valuation for the past 10 years. over those 10 years, the prices of inventory have continued to increase. this would result in INCREASED LIFO reserve. Explanation is that if the last items bought into inventory are the first items sold and recorded in cost of goods sold or COGS, then that implies that the first items bought into inventory are still in inventory. If prices have continued to increase during the 10 year time period referenced in the question, this implies that the cheapest items are still in inventory while the most expensive items were sent to COGS over the last 10 years. This implies that the LIFO reserve would increase so that if we were to add the LIFO reserve to our current LIFO inventory balance it would make our LIFO inventory balance equal to what it would be under FIFO accounting.