12. Zero Corp's total common equity at the end of last year was $405,000 and its net income was $70,000. What was its ROE last year? 13 Chang Corp. has $375,000 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $595,000, and its net income was $25,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 15.0%. What profit margin would the firm need in order to achieve the 15% ROE, holding everything else constant? 14. For 2018, R&K Inc. has reported earnings before interest and taxes of $3.5 million; capital expenditures of $1.2 million, and depreciation of $0.5 million. Net working capital for 2018 is $1.3 million and for 2017 is $0.8 million. The tax rate for R&K is 40%. Calculate R&K's free cash flow. (Show your work.)