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i Allen, Inc. has a total assets turnover of 1.24, a profit margin of 16 percent, and a debt ratio of 0.28. The CFO,
i Allen, Inc. has a total assets turnover of 1.24, a profit margin of 16 percent, and a debt ratio of 0.28. The CFO, Whitney, wants to double the current return on equity by making some changes. If she thinks that the profit margin can be boosted to 19 percent, and is comfortable with increasing the debt ratio to 0.35, how much sales revenue would have to be generated per dollar of assets (owned by the company) in order to double the return on equity? a. $1.53 b. $1.58 c. $1.62 d $1.71 e. $1.89
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