Fitness Fanatics is a regional chain of health clubs. The managers of the clubs,
ID: 2471954 • Letter: F
Question
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
$
870,000
Net operating income
$
27,840
Average operating assets
$
100,000
Assume that the manager of the club is able to reduce expenses by $3,480 without any change in sales or operating assets. What would be the club’s return on investment (ROI)? (Round your Turnover answer to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)
Margin
___%
Turnover
ROI
___%
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:
Explanation / Answer
new NOI Sales $ 870,000 Net operating income $ 27,840 3480 $ 31,320 Average operating assets $ 100,000 If expenses is reduced it will increase Net operating Income ROI = Net Operating Income/Average operating assets 31320/100000 31.32% New ROI New margin = New NOI/Sales 31320/870000 3.60% T/o= 870000
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