7. J Peterman Corp. has $425,000 of assets, and it does not use any debt to finance their operations. Peterman's sales for the last year were $625,000, and its net income was $50,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 20%. What profit margin would the firm need in order to achieve the 20% ROE, holding everything else constant? (2 points)
7. J Peterman Corp. has $425,000 of assets, and it does not use any debt to finance their operations. Peterman's sales for the last year were $625,000, and its net income was $50,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 20%. What profit margin would the firm need in order to achieve the 20% ROE, holding everything else constant? (2 points)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![7. J Peterman Corp. has $425,000 of assets, and it does not use any debt to finance their operations. Peterman's
sales for the last year were $625,000, and its net income was $50,000. Stockholders recently voted in a new
management team that has promised to lower costs and get the return on equity up to 20%. What profit
margin would the firm need in order to achieve the 20% ROE, holding everything else constant? (2 points)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa3ffb7ae-8f5c-44b2-8d1e-e3b3b64d1aff%2Fb6e66312-7cae-4de3-a7e7-19498e77990f%2Fn13v15w_processed.png&w=3840&q=75)
Transcribed Image Text:7. J Peterman Corp. has $425,000 of assets, and it does not use any debt to finance their operations. Peterman's
sales for the last year were $625,000, and its net income was $50,000. Stockholders recently voted in a new
management team that has promised to lower costs and get the return on equity up to 20%. What profit
margin would the firm need in order to achieve the 20% ROE, holding everything else constant? (2 points)
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