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Consider a retail firm with a net profit margin of 3.24%, a total asset turnover of 1.83, total assets of $42.7 million, and a book
Consider a retail firm with a net profit margin of 3.24%, a total asset turnover of 1.83, total assets of $42.7 million, and a book value of equity of $17.4 million. a. What is the firm's current ROE? b. If the firm increased its net profit margin to 3.96%, what would its ROE be? c. If, in addition, the firm increased its revenues by 25% (while maintaining this higher profit margin and without changing its assets or liabilities), what would its ROE be? a. What is the firm's current ROE? The firm's current ROE is%. (Round to one decimal place.) b. If the firm increased its net profit margin to 3.96%, what would its ROE be? The new ROE would be %. (Round to one decimal place.) c. If, in addition, the firm increased its revenues by 25% (while maintaining this higher profit margin and without changing its assets or liabilities), what would its ROE be? The new ROE would be %. (Round to one decimal place.)
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