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As production manager of Widgets-R-Us, you have been brought before the board of directors. Your bonus is paid based upon your profitability. It seems that

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As production manager of Widgets-R-Us, you have been brought before the board of directors. Your bonus is paid based upon your profitability. It seems that the Return On Equity of W-R-U has fallen below the industry average of 20%. The marketing manager is blaming you for low profitability, saying that your profit margin must be below the average and demanding that your bonus be cut (and re-distributed to the Marketing department...). The Board has given you the following data. Defend your bonus. Show (Demonstrate and Explain why) that you should still get your bonus based upon the profit margin: Widgets-R-Us 17.91 INDUSTRY Return On Equity 20.00 Profit Margin 5.00 Total Asset Turnover Equity Multiplier Total Debt Ratio 50 Capital Intensity Ratio 0.50 33 0.6667

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