Question
Pecs Alley is a regional chain of health clubs. The managers of the clubs, who have authority to make investments as needed, are evaluated based
Pecs Alley 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 Springfield Club reported the following results for the past year: The following questions are to be considered independently. Carry out all computations to two decimal places. 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 $4,000. Further assume that this is possible without any increase in operating assets. What would be the club%u2019s return on investment (ROI)? (Round your answer to 2 decimal places. Omit the "%" sign in your response.) Assume that the manager of the club is able to reduce expenses by $3,200 without any change in sales or operating assets. What would be the club%u2019s return on investment (ROI)? (Round interim calculations to 2 decimal places. Round your answer to the nearest whole percentage. Omit the "%" sign in your response.) Assume that the manager of the club is able to reduce operating assets by $24,000 without any change in sales or net operating income. What would be the club%u2019s return on investment (ROI)? (Round interim calculations to 2 decimal places. Round your answer to the nearest whole percentage. Omit the "%" sign in your response.)
Sales $890,000 Net operating income $19,000 Average operating assets $107,000
Requirement 1: Compute the club's return on investment (ROI). (Round interim calculations to 2 decimal places. Round your answer to the nearest whole percentage. Omit the "%" sign in your response.) Return on investment %
Requirement 2: Return on Investment %
Requirement 3: Return on investment % Requirement 4: Return on investment %
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started