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Exercise 10-11 Effects of Changes in Profits and Assets on Return on Investment (ROI) [LO10-1]

[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	$	900,000
Net operating income	$	31,500
Average operating assets	$	100,000

The following questions are to be considered independently.

4. Assume that the manager of the club is able to reduce average operating assets by $40,000 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.)