LeCompte Corp

question 47

Multiple Choice

LeCompte Corp.has $312,900 of assets, and it uses only common equity capital (zero debt) .Its sales for the last year were $620,000, and its net income after taxes 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%.What profit margin would LeCompte need in order to achieve the 15% ROE, holding everything else constant?

• A) 7.57%
• B) 7.95%
• C) 8.35%
• D) 8.76%
• E) 9.20%

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Definitions:

Good Y

Refers to a specific product or commodity in an economic model or discussion, distinct from others by its characteristics or use case.

Budget Constraint

The limitations on the consumption patterns of individuals or households, given their income and the prices of goods and services.

Choice Set

A collection of all possible options available to a consumer or decision-maker.

Choice Set

A collection of all the possible options available for a consumer to choose from in making a decision.