Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / A formula in financial analysis is Return on equity=net profit margin×total asset turnover×equity multiplier
A formula in financial analysis is Return on equity=net profit margin×total asset turnover×equity multiplier. Suppose that the equity multiplier is fixed at 5.0?, but that the net profit margin is normally distributed with a mean of 4.1?% and a standard deviation of 0.4?%, and that the total asset turnover is normally distributed with a mean of 1.4 and a standard deviation of 0.3. Set up and conduct a sampling experiment to find the distribution of the return on equity. Show how the results as a histogram would help explain your analysis and conclusions.
