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Given the following SPM results for three firms: Return on Profit Asset Financial Company Equity (%)...

Given the following SPM results for three firms: Return on Profit Asset Financial Company Equity (%) = Margin X Turnover X leverage A 40.0 12 2.5 1.33 B 40.0 4 5.0 2.0 C 40.0 6 2.0 3.33 a. Explain how the 40.0% Return on Equity for each company was achieved in terms of the three (SPM) management strategies (Profit Margin, Asset Turnover, Financial Leverage) discussed in the handout. b. What is the customer Price Elasticity condition faced by each firm and what is the resulting basic business strategy used by “each” company to achieve the identical Returns on Equity.

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