Compute the return on stockholders equity

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Reference no: EM131340056

Pacific Fixtures lists the following accounts as part of its balance sheet.

Total assets	$10,000,000
Account payable	$2,000,000
Notes Payable (8%)	1,000,000
Bonds (10%)	3,000,000
Common stock at par	1,000,000
Contributed capital in excess of par	500,000
Retained earnings	2,500,000
Total liabilities and stockholder's equity	$10,000,000

Compute the return on stockholder's equity if the company has sales of $20 millions and the following net profit margin:
a. 3 percent

b. 5 percent

Reference no: EM131340056

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