Solution-Consider a retail firm with a net profit margin

Consider a retail firm with a net profit margin of 35 a

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Consider a retail firm with a net profit margin of 3.5%, a total asset turnover of 1.8, total assets of $44 million, and a book value of equity of $18 million.

a. What is the firm's current ROE?

b. If the firm increased its net profit margin to 4%, what would its ROE be?

c. If, in addition, the firm increased its revenues by 20% (while maintaining this higher profit margin and without changing its assets or liabilities), what would its ROE be?

Reference no: EM13566347

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Consider a retail firm with a net profit margin of 35 a

Reference no: EM13566347

Reference no: EM13566347

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