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Consider the following financial data from the past year for Eastcoast Manufacturing Corporation. Annual sales $ 5 , 0 0 0 Net income 4 0

Consider the following financial data from the past year for Eastcoast Manufacturing Corporation.
Annual sales $5,000
Net income 400
Cost of goods sold 3,800
Total assets 4,000 Reduced to 3,500
Inventory 500
Receivables 300
The Eastcoast Manufacturing Corporation has entered into a new contract with a major supplier of raw materials used in the manufacturing process. Under the new arrangement, called vendor managed inventory, the supplier manages its raw material inventory inside the manufacturers plant and bills only the manufacturer when the manufacturer consumes the raw material. This is expected to reduce total assets by $500. What is the expected change in return on assets?

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