Question
Part A Part B Assume that the manager of the club is able to reduce expenses by $2,880 without any change in sales or average
Part A
Part B
Assume that the manager of the club is able to reduce expenses by $2,880 without any change in sales or average operating assets. What would be the clubs return on investment (ROI)? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Part C
Assume that the manager of the club is able to reduce average operating assets by $20,000 without any change in sales or net operating income. What would be the clubs return on investment (ROI)? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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 $ 720,000 $ 12,240 $ 100,000 The following questions are to be considered independently, 2. Assume that the manager of the club is able to increase sales by $72,000 and that, as a result, net operating income increases by $5,184. Further assume that this is possible without any increase in 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) %Step by Step Solution
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