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Last year XYZ (Pty) Ltd had sales of R202 601, assets of R126 178, a profit margin of 5.3%, and an equity multiplier of 1.3.
Last year XYZ (Pty) Ltd had sales of R202 601, assets of R126 178, a profit margin of 5.3%, and an equity multiplier of 1.3. The CFO believes that the company could reduce its assets by R20154 without affecting either sales or costs. Had it reduced its assets in this amount, and had the debt-to-asset ratio, sales and costs remained constant, by how much would the ROE have changed?
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