Last year Rennie Industries had sales of $280,000,assets of $175,000 (which equals total invested capital),a profit margin of 5.3%,and an equity multiplier of 1.2.The CFO believes that the company could reduce its assets by $51,000 without affecting either sales or costs.The firm finances using only debt and common equity.Had it reduced its assets by this amount,and had the debt/total invested capital ratio,sales,and costs remained constant,how much would the ROE have changed? Do not round your intermediate calculations.
A) 4.23%
B) 3.26%
C) 3.77%
D) 3.43%
E) 4.19%