Question: Last year both Hudson Homes and Baldwin Construction earned $1 million in net income. Both companies have assets of $10 million. Hudson generated a return

Last year both Hudson Homes and Baldwin Construction earned $1 million in net income. Both companies have assets of $10 million. Hudson generated a return on equity of 11.1 %, whereas Baldwin produced a return on equity of 20.0%. What can explain the differences in return on equity between the two companies?

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