Acme Inc had a total assets turnover of 1.39 and an equity multiplier of 1.75. Although it had net income of $11,000 on $295,000 of sales, a private equity firm thinks it could have had a net income $10,750 greater just by cutting costs. If this is possible, how much greater would be the return on equity? (Hint: DuPont!)

8.47%

8.86%

8.09%

9.27%

8.82%