Required information [The following information applies to the questions displayed below.] Fitness Fanatics is a regional chain of health clubs that evaluates its club managers based 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 $ 750,000 $ 15,000 $ 100,000 The following questions are to be considered independently. Assume the club manager can increase sales by $75,000 and net operating income by $5,625. Further assume this is possible ithout any increase in average operating assets. What would be the club's return on investment (ROI)? ote: Do not round intermediate calculations. Round your answer to 2 decimal places.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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[The following information applies to the questions displayed below.]

Fitness Fanatics is a regional chain of health clubs that evaluates its club managers based on return on investment (ROI). The company’s Springfield Club reported the following results for the past year:

- Sales: $750,000
- Net operating income: $15,000
- Average operating assets: $100,000

The following questions are to be considered independently.

2. Assume the club manager can increase sales by $75,000 and net operating income by $5,625. Further assume this is possible without any increase in average operating assets. What would be the club’s return on investment (ROI)?

Note: Do not round intermediate calculations. Round your answer to 2 decimal places.

Return on investment (ROI): ____%
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Fitness Fanatics is a regional chain of health clubs that evaluates its club managers based on return on investment (ROI). The company’s Springfield Club reported the following results for the past year: - Sales: $750,000 - Net operating income: $15,000 - Average operating assets: $100,000 The following questions are to be considered independently. 2. Assume the club manager can increase sales by $75,000 and net operating income by $5,625. Further assume this is possible without any increase in average operating assets. What would be the club’s return on investment (ROI)? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Return on investment (ROI): ____%
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