7.

If a firm's net sales (i.e., revenue) increases, but total assets, its debt ratio, and its net profit margin and remain the same as they were before net sales increased, the firm's:

a.ROE would not change.

b.ROE could either increase or decrease depending on the interaction between the equity multiplier and

the days payable ratio.

c.ROE would increase.

d.ROE would decrease.

e.There is insufficient information to determine the effect on ROE

Assume

that XYZ, Inc. has

Debt ratio =

70%

Net profit margin = 15%

Return on assets (ROA) = 7.5%

Find

XYZ's

Total Asset Turnover ratio.

(Enter answer as a ratio

-

that is, do not convert to a percent)