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This year Andrews achieved an ROE of 11.5%. Suppose management takes measures that increase Asset turnover (Sales/Total Assets) next year. Assuming Sales, Profits, and financial
This year Andrews achieved an ROE of 11.5%. Suppose management takes measures that increase Asset turnover (Sales/Total Assets) next year. Assuming Sales, Profits, and financial leverage remain the same, what effect would you expect this action to have on Andrews's ROE?
| Andrews ROE will increase. | |
| Andrews ROE will decrease. | |
| Andrews ROE will remain the same. |
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