Consider a retail firm with a net profit margin of 3.5%, a total asset turnover of 1.8, total assets of $44 million, and a book value of equity of $18 million. a. What is the firms current ROE? b. If the firm increased its net profit margin to 4%, what would its ROE be? c. If, in addition, the firm increased its revenues by 20% (while maintaining this higher profit margin and without changing its assets or liabilities), what would its ROE be? I know the answer. But I'm unsure how they got 1.2. part of the solution below that is confusing me. New sales would be=($79.2 million*1.2)=$95.04 million