By how much would the cost reduction improve the roe

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Reference no: EM131624693

Last year Ann Arbor Corp had $105,000 of assets, $305,000 of sales, $20,000 of net income, and a debt-to-total-assets ratio of 37.5%. The new CFO believes a new computer program will enable it to reduce costs and thus raise net income to $33,000. Assets, sales, and the debt ratio would not be affected. By how much would the cost reduction improve the ROE?

Reference no: EM131624693

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