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

Total assets	$	5,300,000
Long-term debt (11% interest rate)		$720,000
Total stockholders equity	$	2,600,000
Interest paid on long-term debt		$79,200
Net income		$390,000

Total assets at the beginning of the year were $5,100,000; total stockholders equity was $2,400,000. The companys tax rate is 40%.

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).)

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

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3.

Is financial leverage positive or negative?

	Positive
	Negative