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Last year Rennie Industries had sales of $500,000, assets of $175,000, a profit margin of 5.3%, and an equity multiplier of 1.2. The CFO believes

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Last year Rennie Industries had sales of $500,000, assets of $175,000, a profit margin of 5.3%, and an equity multiplier of 1.2. The CFO believes that the company could reduce its assets by $51,000 without affecting net income, sales, or the equity multiplier. Had it reduced its assets by this amount, how much would the ROE have changed? (Hint: Use the DuPont equation to find ROE before and after the proposed change, then take the difference.) 03.05% 7.47% O 3.65% 4.50% 6.99%

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