The firm, MBI, has Total Assets of $190,000, Equity of $100,000, Net Profit Margin of 3.7 percent, Total Asset Turnover of 2.89. Calculate the firms Return on Equity, ROE (Hint: Use DuPont Identity). If the firm increases its debt-equity ratio will the ROE increase or decrease (Hint: Again, think about DuPont Identity)?

Group of answer choices

20.32 percent, increase

20.32 percent, decrease

38.99 percent, increase

38.99 percent, decrease

5.67 percent, increase