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I in addition firm increased its revenues by 20 while

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Consider a retailing firm with a net profit margin of 3.5%, a total asset turnover of 1.8, total assets of $44 million, and a book value of equity of $18 million.

  • What is the firm's current ROE?
  • If the firm increased its net profit margin to 4%, what would be its ROE?
  • If, in addition, the firm increased its revenues by 20% (while maintaining this higher profit margin and without changing its assets or liabilities), what would be its ROE?

Reference no: EM13476893

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