Last year Blease Inc had a total assets turnover of 1.33 and an equity multiplier of...

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Last year Blease Inc had a total assets turnover of 1.33 and anequity multiplier of 1.75. Its sales were $205,000 and its netincome was $10,600. The firm finances using only debt and commonequity and its total assets equal total invested capital. The CFObelieves that the company could have operated more efficiently,lowered its costs, and increased its net income by $10,250 withoutchanging its sales, assets, or capital structure. Had it cut costsand increased its net income by this amount, how much would the ROEhave changed? Do not round your intermediate calculations.

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First the ROE is calculated without lowering costs and operating efficiently Information provided Asset turnover 133 Equity multiplier 175 See Answer

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Last year Blease Inc had a total assets turnover of 1.33 and anequity multiplier of 1.75. Its sales were $205,000 and its netincome was $10,600. The firm finances using only debt and commonequity and its total assets equal total invested capital. The CFObelieves that the company could have operated more efficiently,lowered its costs, and increased its net income by $10,250 withoutchanging its sales, assets, or capital structure. Had it cut costsand increased its net income by this amount, how much would the ROEhave changed? Do not round your intermediate calculations.