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Lowell Corp. has $312,900 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $620,000, and its
Lowell Corp. has $312,900 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $620,000, and its net income after taxes was $24,655. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 12%. What profit margin would LeCompte need in order to achieve the 12% ROE, holding everything else constant?
A. 7.57%
B. 6.06%
C. 6.35%
D. 6.76%
E. 9.20%
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