The following information applies to the questions displayed below The Abs Shoppe 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 Abs Shoppe reported the following results for the past year Sales $ 860,000 Net operating income $ 26,660 Average operating assets $ 100,000 References Section Break Exercise 12 12 Effects of Changes in Profits and Assets on Return on Investment (ROI) LO12 1 5a value 1 11 points Required information Exercise 12 12 Part 1 Required 1 Compute the clubs return on investment (ROI) (Do not round intermediate calculations Round your answers to 2 decimal places ) References eBook Resources Worksheet Difficulty Medium Exercise 12 12 Part 1 Learning Objective 12 01 Compute return on investment (ROI) and show how changes in sales, expenses, and assets affect ROI Check my work 5b value 1 11 points Required information Exercise 12 12 Part 2 2 Assume that the manager of the club is able to increase sales by $86,000 and that as a result net operating income increases by $7,396 Further assume that this is possible without any increase in operating assets What would be the clubs return on investment (ROI) (Do not round intermediate calculations Round your answers to 2 decimal places ) References eBook Resources Worksheet Difficulty Medium Exercise 12 12 Part 2 Learning Objective 12 01 Compute return on investment (ROI) and show how changes in sales, expenses, and assets affect ROI Check my work 5c value 1 11 points Required information Exercise 12 12 Part 3 3 Assume that the manager of the club is able to reduce expenses by $3,440 without any change in sales or operating assets What would be the clubs return on investment (ROI) (Do not round intermediate calculations Round your answers to 2 decimal places ) References eBook Resources Worksheet Difficulty Medium Exercise 12 12 Part 3 Learning Objective 12 01 Compute return on investment (ROI) and show how changes in sales, expenses, and assets affect ROI Check my work 5d value 1 11 points Required information Exercise 12 12 Part 4 4 Assume that the manager of the club is able to reduce operating assets by $50,000 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 answers to 2 decimal places )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 15, 2024

[The following information applies to the questions displayed below.] The Abs Shoppe is a regional chain of health clubs. The managers of the clubs, who

[The following information applies to the questions displayed below.]

The Abs Shoppe 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 Abs Shoppe reported the following results for the past year:


Sales	$	860,000
Net operating income	$	26,660
Average operating assets	$	100,000

References

Section BreakExercise 12-12 Effects of Changes in Profits and Assets on Return on Investment (ROI) [LO12-1]

value: 1.11 points

Required information

Exercise 12-12 Part 1

Required:
1.	Compute the clubs return on investment (ROI). (Do not round intermediate calculations. Round your answers to 2 decimal places.)

References

eBook & Resources

WorksheetDifficulty: Medium

Exercise 12-12 Part 1Learning Objective: 12-01 Compute return on investment (ROI) and show how changes in sales, expenses, and assets affect ROI.

Check my work

5b.

value: 1.11 points

Required information

Exercise 12-12 Part 2

2.	Assume that the manager of the club is able to increase sales by $86,000 and that as a result net operating income increases by $7,396. Further assume that this is possible without any increase in operating assets. What would be the clubs return on investment (ROI)? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

References

eBook & Resources

WorksheetDifficulty: Medium

Exercise 12-12 Part 2Learning Objective: 12-01 Compute return on investment (ROI) and show how changes in sales, expenses, and assets affect ROI.

Check my work

value: 1.11 points

Required information

Exercise 12-12 Part 3

3.	Assume that the manager of the club is able to reduce expenses by $3,440 without any change in sales or operating assets. What would be the clubs return on investment (ROI)? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

References

eBook & Resources

WorksheetDifficulty: Medium

Exercise 12-12 Part 3Learning Objective: 12-01 Compute return on investment (ROI) and show how changes in sales, expenses, and assets affect ROI.

Check my work

value: 1.11 points

Required information

Exercise 12-12 Part 4

4.	Assume that the manager of the club is able to reduce operating assets by $50,000 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 answers to 2 decimal places.)