Assume that the new actions will have no effect on total


Hindelang Housewares Company (HHC) has $2,000,000 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $1,600,000, and its net income was $160,000. 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 HHC need in order to achieve the 15% ROE? Assume that the new actions will have no effect on total assets and sales, and it will not change the company's determination to use 100% equity to finance its operations.

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Operation Management: Assume that the new actions will have no effect on total
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