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This year Company X achieved an ROE of 14.8%. Suppose management takes measures that decrease Asset turnover (Sales/Total Assets) next year. Assuming Sales, Profits, and
This year Company X achieved an ROE of 14.8%. Suppose management takes measures that decrease 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 Company X's ROE?
a: Company X's ROE will decrease
b: Company X's ROE will remain the same
c: Company X's ROE will increase
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