electronic devices when you enter the clasuroom 0-001Connedt X M ME Reade 2 er 1
ID: 2547690 • Letter: E
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electronic devices when you enter the clasuroom 0-001Connedt X M ME Reade 2 er 11 Homework Help Se The folowing intormation applies to the questions isplayed 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 (RO). The company's Springfield Club reported the following results for the past year 3 of 4 Sales $790,80 Net operating income18,96e Average operating assets $100,88 The following questions are to be considered independenty 3. Assume that the manager of the club is able to reduce expenses by $3,160 wthout any change in sales or average operating assets. What would be the club's return on investment (RO? tDo not round Intermediete colculatlons Round your aniswer to 2 decimal places.) 13 Next>Explanation / Answer
A. Margin = Net operating income / Sales
= (18,960 + 3160) / 7,90,000
= 22,120 / 7,90,000
= 2.8%
Turnover = Sales / Average operating asset
= 7,90,000 / 1,00,000
= 7.9
Return On Investment (ROI) = Margin x Turn-over
= 2.8% x 7.9
= 22%
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