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Revenues increased by 30% in your firm during the past year while total assets increased only 5% and equity financing ratios remained constant at 50%.
Revenues increased by 30% in your firm during the past year while total assets increased only 5% and equity financing ratios remained constant at 50%. Return on equity remained constant at 12%. Why didn't return on equity increase?
a) Total margins dropped
b) Total asset turnover dropped
c) Total asset turnovers and total margins dropped
d) None of these are correct
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