Question $9$

$3$ pts

Last year Nash Corp had $$305,000$ of assets $($which is equal to its total invested capital$),$ $$403,000$ of sales, $$28,250$ of net income, and a debt$-$to$-$total$-$capital ratio of $39\%.$ The new CFO believes the firm has excessive fixed assets and inventory that could be sold, enabling it to reduce its total assets and total invested capital to $$252,500.$ The firm finances using only debt and common equity. Sales, costs, and net income would not be affected, and the firm would maintain the same capital structure $($but with less total debt$).$ By how much would the reduction in assets improve the ROE?

A$.2\mathrm{.}85\%$

B$.3\mathrm{.}00\%$

C$.3\mathrm{.}16\%$

D$.3\mathrm{.}31\%$

E$.3\mathrm{.}48\%$