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This year Baldwin achieved an ROE of 1.2%. Suppose next year the profit margin (Net Income/Sales) increases. Assuming sales, assets and financial leverage remain the

This year Baldwin achieved an ROE of 1.2%. Suppose next year the profit margin (Net Income/Sales) increases. Assuming sales, assets and financial leverage remain the same next year, what effect would you expect this action to have on Baldwin's ROE?
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Baldwin ROE will remain the same.
Baldwin ROE will decrease.
Baldwin ROE will increase.

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