Problem:

XYZ Corporation has $312,900 in total assets, and its uses only common equity capital (i.e., zero debt). Its sales last year were $620,000, and its net income after tax was $24,655. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 15%.

Required:

Question 1: What net profit margin would LeCompte need in order to achieve the 15% ROE holding everything else constant?

Please provide step by step solution and also show all work.