This year Andrews achieved an ROE of 23.1%. Suppose the Board of Directors of Andrews mandates that management take measures to increase financial Leverage (=Assets/Equity) next year. Assuming Sales, Profits, and Assets remain the same next year, what effect would you expect this new Leverage policy will have on Andrews ROE?

• Andrews ROE will decrease.

• Andrews ROE will increase.

• Andrews ROE will remain the same.