If a firm's net profit margin is 5%, its total asset turnover is 1.5 times, and its debt ratio is 20%, its return on equity is: a. 7.14%. b. 9.38%. c. 10.71%. d. 12.50%. e. 15.00%.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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General Accounting

If a firm's net profit margin is 5%, its total asset turnover
is 1.5 times, and its debt ratio is 20%, its return on
equity is:
a. 7.14%.
b. 9.38%.
c. 10.71%.
d. 12.50%.
e. 15.00%.
Transcribed Image Text:If a firm's net profit margin is 5%, its total asset turnover is 1.5 times, and its debt ratio is 20%, its return on equity is: a. 7.14%. b. 9.38%. c. 10.71%. d. 12.50%. e. 15.00%.
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