Pacific Fixtures lists the following accounts as part of its balance sheet.

Total assets $10,000,000

Accounts payable $2,000,000

Notes payable (8%)

1,000,000 Bonds (10%) 3,000,000

Common stock at par 1,000,000

Contributed capital in excess of par 500,000

Retained earnings 2,500,000

Total liabilities and stockholders’ equity $10,000,000

Compute the return on stockholders’ equity if the company has sales of $20 million and the following net profit margin:

a. 3 percent

b. 5 percent