Chang Corp

question 20

Multiple Choice

Chang Corp.has $375,000 of assets,and it uses only common equity capital (zero debt) .Its sales for the last year were $595,000,and its net income was $25,000.Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 15.0%.What profit margin would the firm need in order to achieve the 15% ROE,holding everything else constant?

• A)9.45%
• B)9.93%
• C)10.42%
• D)10.94%
• E)11.49%

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Definitions:

Survival Anxiety

A motivational factor that drives individuals or organizations to change due to the fear of failure or extinction.

Current Behaviours

Observable actions or conduct of individuals in the present, often assessed in organizational contexts for performance evaluations or development planning.

Double-Loop Learning

A learning process where, in addition to making adjustments based on errors, underlying policies and objectives are also questioned and potentially altered.

Organizational Learning

The process through which an organization acquires, develops, and transfers knowledge to improve its performance and adapt to the environment.