How much would the roe have changed

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Reference no: EM131197798

Last year Mason Inc. had a total assets turnover of 1.5 and an equity multiplier of 1.75. Its sales were $195,000 and its net income was $10,000. The CFO believes that the company could have operated more efficiently, lowered its costs, and increased its net income by $5,000 without changing its sales, assets, or capital structure. Had it cut costs and increased its net income in this amount, by how much would the ROE have changed? (Hint: calculate ROE with the old and new profit margins!) Please show work

Reference no: EM131197798

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