Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

AAA Corp. had a total assets turnover of 1 . 3 5 and an equity multiplier of 1 . 6 5 . Its sales were

AAA Corp. had a total assets turnover of 1.35 and an equity multiplier of 1.65. Its sales were $375,000 and its net income was $12,500. The CFO believes that the company could have sold its products at a higher price point and lowered its costs, so the new net income would be $27,000 without changing its sales, assets, liabilities or equity. Given these changes, how much would the ROE have changed? Do not round your intermediate calculations.
a.7.67%
b.10.29%
.8.70%
d.11.41%
0 e.8.61%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions