
Answer-first summary for fast verification
Answer: 1.3
**Explanation:** The correct answer is **B** (1.3). According to the DuPont analysis, Return on Equity (ROE) can be decomposed into: \[ ROE = \text{Net Profit Margin} \times \text{Total Asset Turnover} \times \text{Financial Leverage} \] Rearranging the formula to solve for Total Asset Turnover: \[ \text{Total Asset Turnover} = \frac{ROE}{\text{Net Profit Margin} \times \text{Financial Leverage}} \] Substituting the given values: \[ \text{Total Asset Turnover} = \frac{10\%}{4\% \times 2.0} = 1.25 \approx 1.3 \] - **Option A (1.0)** is incorrect because it mistakenly uses the EBIT Margin instead of the Net Profit Margin in the calculation. - **Option C (1.5)** is incorrect because it includes the Interest Burden, which is not part of the standard DuPont formula for Total Asset Turnover.
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