Last year Central Chemicals had sales of $205,000, assets of $127,500, a profit margin of 5.3%, and anequity multiplier of 1.2. The CFO believes that the company could reduce its assets by $21,000without affecting either sales or costs. Had it reduced its assets in this amount, and had the debt-to-assets ratio, sales, and costs remained constant, by how much would the ROE have changed?

Answer rating: 100% (QA)

Central Chemicals Sales 205000 Assets 127500 Profit Margin 53 Equity Multiplier 12 Assets r... View the full answer