Suppose that a firm has a profit margin of $2\mathrm{.}00\%$ and an equity multiplier of $1\mathrm{.}5,$ with total sales of $$200$ million and total assets of $$80$ million.

Which of the following most closely approximates the firm$$s ROE?

$0\mathrm{.}80\%$

$5\mathrm{.}00\%$

$7\mathrm{.}50\%$

$0\mathrm{.}06\%$

Suppose that a firm has a profit margin of $4\mathrm{.}00\%$ and an equity multiplier of $1\mathrm{.}6,$ with total sales of $$300$ million and total assets of $$120$ million.

Which of the following most closely approximates the firm$$s ROE?

$0\mathrm{.}13\%$

$16\mathrm{.}00\%$

$1\mathrm{.}60\%$

$10\mathrm{.}00\%$