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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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