Question

Cream of Tomato Company has the following data available.
Net income = $250,000
Sales = $2.5 million
Total asset turnover = 3
Equity multiplier = 2.5
Cream of Tomato does not have any preferred stock outstanding. Note that the equity
multiplier is defined as total assets to equity. Calculate the return on assets and return on
equity for Cream of Tomato.

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