Problem:
You are considering investing in Lenny's Lederhosen, Inc. You have been able to locate the following information on the firm: total assets = $20 million, accounts receivable = $6 million, ACP = 20 days, net income = $5 million, and debt-to-equity ratio = 2.5 times.
Required:
Question: What is the ROE for the firm?
Note: Show supporting computations in good form.