Last year candle corp had 200000 of assets 300000 of sales , Ask an Expert

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Last year, Candle Corp had $200,000 of assets, $300,000 of sales, $20,000 of net income, and a debt-to-total-assets ratio of 40%. The new CFO believes a new computer program will enable it to reduce costs and thus raise net income to $30,000. Assets, sales, and the debt ratio would not be affected. By how much would the cost reduction improve the ROE ?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M998705

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