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Hudson Corporation’s present year ROE remained at 14% level, while the profit margin was reduced from 8% to 4% and the leverage ratio increase from 1.2 to 1.5. What would be the effect on asset turnover?   a. Remain constant b. Increase from 1.46 to 2.33 c. Decrease from 14.58 to 2.33 d. Increase from 4.76 to 9.60

Hudson Corporation’s present year ROE remained at 14% level, while the profit margin was reduced from 8% to 4% and the leverage ratio increase from 1.2 to 1.5. What would be the effect on asset turnover?   a. Remain constant b. Increase from 1.46 to 2.33 c. Decrease from 14.58 to 2.33 d. Increase from 4.76 to 9.60

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter15: Capital Investment Analysis
Section: Chapter Questions
Problem 15.1.3MBA: Financial leverage MicrosoCortrepotied (MSFT) reported the following data (in millions) for a tern...
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Hudson Corporation’s present year ROE remained at 14% level, while the profit margin was reduced from 8% to 4% and the leverage ratio increase from 1.2 to 1.5. What would be the effect on asset turnover?
 
a. Remain constant
b. Increase from 1.46 to 2.33
c. Decrease from 14.58 to 2.33
d. Increase from 4.76 to 9.60
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