A formula in financial analysis is Return on equity=net profit margintotal asset turnoverequity multiplier. Suppose that the equity multiplier is fixed at 5.0, but that the net profit margin is normally distributed with a mean of 4.1% and a standard deviation of 0.4%, and that the total asset turnover is normally distributed with a mean of 1.4 and a standard deviation of 0.3. Set up and conduct a sampling experiment to find the distribution of the return on equity. Show how the results as a histogram would help explain your analysis and conclusions.

Place"Equity Multiplier,""Net Profit MarginMean," "Net Profit Margin StdDev," "Total AssetMean," and"Total Asset StdDev" in column A in rows1, 2,3, 4, and5, respectively, and place their corresponding values in column B. Place the column headers"Net ProfitMargin," "Total AssetTurnover," and"Return onEquity" in cellsC1, D1, andE1, respectively. To generate random numbers for the net profit margin based on the normaldistribution, in the cells in the"Net ProfitMargin" column, enter the formula =NORM.INV(

RAND(1)

RAND()

RANDBETWEEN(-1,1)

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) in the cells in column C below C1. To generate random numbers for the total asset turnover based on the normaldistribution, in the cells in the"Total AssetTurnover" column, enter the formula =NORM.INV(

RANDBETWEEN(-1,1)

RAND(1)

RAND()

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) in the cells in column D below D1. To calculate return on equity distributionvalues, in the cells in column E belowE1, multiply pairs of values in the"Net Profit" and"Total AssetTurnover" columns by the value in cell

$C$1.

$B$2.

$B$5.

$B$1.