Required information Exercise 11-11 Effects of Changes in Profits and Assets on Return on Investment (ROI) (LO11-1) [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 Net operating income Average operating assets $ 730,000 $ 13, 140 $ 100,000 The following questions are to be considered independently. Exercise 11-11 Part 4 4. Assume that the manager of the club is able to reduce average operating assets by $60,000 without any change in sales or net operating income. 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) Exercise 11-12 Evaluating New Investments Using Return on Investment (ROI) and Residual Income [LO11-1, LO11-2] Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum required rate of return Division A $ 16,000,000 $ 3,200,000 $ 752,000 9.00% Division B $ 36,000,000 $ 7,200,000 $ 576,000 9.50% Division C $20,800,000 $5,200,000 $ 540, 800 10.40% Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 10% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req Req 3B Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Margin Turnover ROI Division A Division B Division C