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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
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 $ 1.400.000 70.000 350.000 9. value: 6.25 points Required information Required: 1. Compute the Springfield club's return on investment (ROI). % Margin Turnover times RO 2. Assume that the manager of the club is able to increase sales by $70,000 and that, as a result, net operating income increases by $18,200. Further assume that this is possible without any increase in operating assets. What would be the club's return on investment (ROI)? (Round your answers to 1 decimal place.) % Margin Turnover ROI times References eBook & Resources Worksheet Difficulty: 1 Easy Learning Objective: 12-01 Compute return on investment (ROI) and show how changes in sales, expenses, and assets affect ROI Check my work value: Required information 6.25 points 3. Assume that the manager of the club is able to reduce expenses by $14,000 without any change in sales or operating assets. What would be the club's return on investment (ROI)? Margin Turnover ROI times 4. Assume that the manager of the club able to reduce operating assets by $70,000 without any change in sales or net operating income. What would be the club's return on investment (ROI)? Margin Turnover times ROI
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