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DuPont System The following data are from Saratoga Farms, Inc, 2014 financial statement: Sales $2,000,000...

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Accounting

DuPont System The following data are from Saratoga Farms, Inc, 2014 financial statement:

Sales $2,000,000

Net Income $200,000

Total Assets $1,000,000

Debt to TA Ratio 60%

a. Construct and solve the DuPont and Modified DuPont equations for Saratoga Farms.

b. What would be the impact on ROE if the debt to TA ratio were 80%?

c. What would be the impact on ROE if the debt to TA were 20%?

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