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Answer :
To calculate Spinnit Limited's return on equity, we need to use the formula: Return on Equity (ROE) = Net Profit Margin × Total Asset Turnover × Equity Multiplier.
First, let's calculate the equity multiplier using the formula: Equity Multiplier = Total Assets ÷ Total Liabilities.
Given that Spinnit Limited has total assets of $2,002,077 and total liabilities of $840,790, the equity multiplier can be calculated as follows:
Equity Multiplier = $2,002,077 ÷ $840,790 = 2.38.
Next, we'll calculate the return on equity using the formula mentioned earlier. We already have the net profit margin, which is 11.3%, and the total asset turnover, which is 1.37.
Return on Equity = 11.3% × 1.37 × 2.38 = 35.59%.
Rounding to the nearest 0.1%, Spinnit Limited's return on equity is approximately 35.6%.
Therefore, the correct answer is not provided among the options given.
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