If the following ratios were computed before the change, what will be the new ROE if the new product is added and sales remain constant?
I am considering adding a new product to my firm's existing product line. It will cause a 15 percent increase in my profit margin (i.e., new PM = old PM ´ 1.15), but it will also require a 50 percent increase in total assets (i.e., new TA = old TA ´ 1.5). I expect to finance this asset growth entirely by debt. If the follow