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Consider a retail firm with a net profit margin of 3 . 8 9 % 3 . 8 9 % , a total asset turnover
Consider a retail firm with a net profit margin of a total asset turnover of total assets of $million and a book value of equity of $ million.
a What is the firm's current ROE?
b If the firm increased its net profit margin to what would be its ROE?
c If in addition, the firm increased its revenues by maintaining this higher profit margin and without changing its assets or liabilities what would be its ROE?
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