Which of the following will allow your firm to achieve its targeted 16 percent ROA with an asset turnover of 2.5?
A)A leverage ratio of .0667
B)A P/E ratio of 14
C)A profit margin of 15 percent
D)A profit margin of 6.4 percent ROE = Profit margin x Asset turnover
)16 = Profit margin x 2.50

Question

Quizplus · Accepted Answer

To achieve a 16% ROA with an asset turnover of 2.5, the profit margin must be 16/2.5 = 6.4%.

Which of the Following Will Allow Your Firm to Achieve