During the current year, Acme Company has average total asse…
During the current year, Acme Company has average total assets of $500,000, total asset turnover of 1.10, and a net profit margin percentage of 12.0%. Acme’s interest expense equals 5.0% of its total liabilities and its income tax rate is 21.0%. For purposes of computing its operating income (or EBIT), Acme’s contribution margin ratio is 25%. If Acme’s return on equity is 26.4%, what is Acme’s equity multiplier? Round to two decimal points.
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