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Question

Suppose a firm's total assets turnover ratio falls from 10% to 9%, but at the

same time its profit margin rises from 9% to 10%, and its equity multiplier increases from 1.5 to 2. Under these conditions, the ROE will ___________ by_____________.

A.decrease; 0.45%

B.increase; 0.45%

C.increase; 0.30%

D.Decrease; 0.30%

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