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Selected financial data from the June 30 year-end statements of Safford Company are given below: Total assets $ 5,200,000 Long-term debt (11% interest rate) $

Selected financial data from the June 30 year-end statements of Safford Company are given below:

Total assets $ 5,200,000
Long-term debt (11% interest rate) $ 580,000
Total stockholders equity $ 2,100,000
Interest paid on long-term debt $ 63,800
Net income $ 430,000

Total assets at the beginning of the year were $5,000,000; total stockholders equity was $1,900,000. The companys tax rate is 35%.

Required:

1. Compute the return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

2. Compute the return on equity. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

3. Is financial leverage positive or negative?

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