Required information [The following information applies to the questions display

Question

Required information [The following information applies to the questions displayed below. Fitness Fanatics is a regional chain of health clubs. The managers of the clubs, who have authority to make investments as needed, are evaluated based largely on return on investment (ROI). The company's Springfield Club reported the following results for the past year: Sales Net operating income Average operating assets 100,000 770,000 16,940 The following questions are to be considered independently. 3. Assume that the manager of the club is able to reduce expenses by $3,080 without any change in sales or average operating assets. What would be the club's return on investment (ROI)? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Return on investment (ROI)

Explanation / Answer

ROI = Net operating income*100/average operating assets

3) ROI = (16940+3080)*100/100000 = 20.02%

4) ROI = 16940*100/70000 = 24.20%

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