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This year Andrews achieved an ROE of 18.6%. Suppose management takes measures that decrease Asset turnover (Sales/Total Assets) next year. Assuming Sales, Profits, and financial leverage remain the same, what effect would you expect this action to have on Andrews’s ROE?

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  •  Andrews ROE will remain the same
  •  Andrews ROE will increase
  •  Andrews ROE will decrease
Jos Simulation Answered question April 9, 2025