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  3. 7. compton manufacturing has $312,900 of assets, a

7. Compton Manufacturing has $312,900 of assets, and it uses only common equity capital (zero...

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Finance

7. Compton Manufacturing has $312,900 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $620,000, and its net income after taxes was $24,655. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 15%. What profit margin would Compton need in order to achieve the 15% ROE, holding everything else constant?

8. Last year XYZ had sales of $315,000 and a net income of $17,832, and its year-end assets were $210,000. The firm's total-debt-to-total-assets ratio was 42.5%. Based on the DuPont equation, what was XYZ's ROE?

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