"ABC" Company has $126,000 of assets, and it uses only equity to finance its assets....
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"ABC" Company has $126,000 of assets, and it uses only equity to finance its assets. Its sales for the last year were $153,000, and its net income after taxes was $91,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity to 15%. What profit margin would "ABC" Company need in order to achieve the 15% ROE, holding everything else constant? Notec in writing the value of the new ROE make sure to write in u decimal format (rounded to nearest 4 digits), and not as a percentage. For example, write 0.12 instead of 12
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