Question: During the current year, Al Inc. had average total assets are $500,000, total asset turnover of 1.10, and a net profit margin percentage of 12.0%.

During the current year, Al Inc. had average total assets are $500,000, total asset turnover of 1.10, and a net profit margin percentage of 12.0%. Al's interest expense equals 5.0% of its total liabilities and its income tax rate is 21.0%. For purposes of computing its operating income (or EBIT), Al's contribution margin ratio is 25%. If Al's return on equity is 26.4%, what is Al's equity multiplier?

O 0.50

O 0.67

O 1.50

O 2.00

O None of the above

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