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Consider a retail firm with a net profit margin of 3.94%, a total asset turnover of 1.85, total assets of $45.7 million, and a book
Consider a retail firm with a net profit margin of 3.94%, a total asset turnover of 1.85, total assets of $45.7 million, and a book value of equity of $17.2 million. a. What is the firm's current ROE? b. If the firm increased its net profit margin to 4, 49%, what would be its ROE? c. If, in addition, the firm increased its revenues by 20% (maintaining this higher profit margin and without changing its assets or liabilities) what would be its ROE? a. What is the firm's current ROE? The firm's current ROE is %. b. If the firm increased its net profit margin to 4.49%, what would be its ROE? The new ROE would be %. If, in addition, the firm increased its revenues by 20% (maintaining this higher profit margin and without changing its assets or liabilities) what would be its ROE? The new ROE would be %
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