Last year Urbana Corp.had $197,500 of assets, $307,500 of sales, $19,575 of net income, and a debt-to-total-assets ratio of 37.5%.The new CFO believes a new computer program will enable it to reduce costs and thus raise net income to $33,000.Assets, sales, and the debt ratio would not be affected.By how much would the cost reduction improve the ROE?
A) 9.32%
B) 9.82%
C) 10.33%
D) 10.88%
E) 11.42%

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The Answer of Last year Urbana Corp.had $197,500 of assets, $307,500 of sales, $19,575 of net income, and a debt-to-total-assets ratio of 37.5%.The new CFO believes a new computer program will enable it to reduce costs and thus raise net income to $33,000.Assets, sales, and the debt ratio would not be affected.By how much would the cost reduction improve the ROE?
A) 9.32%
B) 9.82%
C) 10.33%
D) 10.88%
E) 11.42%

Last Year Urbana Corp