A fire destroyed a large percentage of the financial records of the Carter Health System. You have the task of piecing together information to prepare a financial report. You have found the profit margin to be 5.4 percent. If sales were $4 million on total assets of $2 million and the amount of debt financing was $800,000, what was Carter's return on equity? (Hint: Use the Du Pont equation to answer this question.)
a. 13.8%
b. 18%
c. 18.3%
d. 19%