Question
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 | $ | 1,400,000 |
| Net operating income | $ | 70,000 |
| Average operating assets | $ | 350,000 |
1. Assume that the manager of the club is able to reduce average operating assets by $70,000 without any change in sales or net operating income. What would be the clubs return on investment (ROI)?
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