Required information [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 The following questions are to be considered independently. $ 820,000 $ 22,140 $ 100,000 4. Assume that the manager of the club is able to reduce average operating assets by $50,000 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)
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- 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 $ 940,000 Net operating income $ 36000 Average operating assets 100,000 The following questions are to be considered independently. 1- Assume that the manager of the club is able to reduce expenses by $3,760 without any change in sales or operating assets. What would be the club’s return on investment (ROI)? 2- Assume that the manager of the club is able to reduce operating assets by $20,000 without any change in sales or net operating income. What would be the club’s return on investment (ROI)? ( Do not intermediate calculations. Round your answer to 2 decimal places.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 720,000 $ 12,240 $ 100,000 The following questions are to be considered independently. Assume that the manager of the club is able to increase sales by $72,000 and that, as a result, net operating income increases by $5.184. Further assume that this is possible without any increase in average operating assets. What would be the club's return on investment (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: Sales Net operating income Average operating assets $ 720,000 12,240 $ 100,000 The following questions are to be considered independently. 4. Assume that the manager of the club is able to reduce average operating assets by $20,000 without any change in sales or net operating income. What would be the club's return on investment (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: Sales Net operating income Average operating assets 720,000 $ 12,240 $ 100,000 The following questions are to be considered independently. Assume that the manager of the club is able to reduce expenses by $2,880 without any change in sales or average operating assets. What would be the club's return on investment (ROI)?Pecs Alley is a regional chain of health clubs. The managers of the clubs, who have authority to makeinvestments as needed, are evaluated based largely on return on investment (ROI). The Springfield Clubreported the following results for the past year:Sales .................................................................................. $1,400,000Net operating income ......................................................... $70,000Average operating assets ................................................... $350,000Required:The following questions are to be considered independently. Carry out all computations to two decimalplaces.1. Compute the club’s return on investment (ROI).2. Assume that the manager of the club is able to increase sales by $70,000 and that, as a result, netoperating income increases by $18,200. Further assume that this is possible without any increase inoperating assets. What would be the club’s return on investment (ROI)?3. Assume that the manager of the club is…Effects of Changes in Profits and Assets on Return on Investment (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: Required: The following questions are to be considered independently. Carry out all computations to two decimal places. 1. Compute the Springfield club’s return on investment (ROI). 2. Assume that the manager of the club is able to increase sales by $70,000 and that, as a result, net operating income increases by $18,200. Further assume that this is possible without any increase in average operating assets. What would be the club’s return on investment (ROI)? 3. Assume that the manager of the club is able to reduce expenses by $14,000 without any change in sales or average operating assets. What would be the club’s return on investment (ROI)? 4.…
- Please send answer in chart set up Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Sales Income AverageInvested Assets Electronics $ 39,840,000 $ 2,988,000 $ 16,600,000 Sporting goods 25,200,000 2,142,000 12,600,000 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company?2. Assume a target income level of 11% of average invested assets. Compute residual income for each department. Which department generated the most residual income for the company?3. Assume the Electronics department is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted?A family friend has asked your help in analyzing the operations of three anonymous companies operatingin the same service sector industry. Supply the missing data in the table below:CompanyA B CSales .............................................................. $9,000,000 $7,000,000 $4,500,000Net operating income ................................... $ ? $ 280,000 $ ?Average operating assets ............................. $3,000,000 $ ? $1,800,000Return on investment (ROI) .......................... 18% 14% ?Minimum required rate of return:Percentage ................................................ 16% ? 15%Dollar amount ............................................ $ ? $ 320,000 $ ?Residual income ............................................ $ ? $ ? $ 90,000As a marketing manager for one of the world’s largest automakers, you are responsible for the advertising campaign for a new energy-efficient sports utility vehicle. Your support team has prepared the following table, which summarizes the (year-end) profitability, estimated number of vehicles sold, and average estimated selling price for alternative levels of advertising. The accounting department projects that the best alternative use for the funds used in the advertising campaign is an investment returning 9 percent. In light of the staggering cost of advertising (which accounts for the lower projected profits in years 1 and 2 for the high and moderate advertising intensities), the team leader recommends a low advertising intensity in order to maximize the value of the firm. Do you agree? Explain. Profitability by Advertising Intensity. Profits (in millions) Units sold (in thousands) Average selling price Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 Year…
- Jefferson Memorial Hospital is an investment center as a division of Hospitals United. During the past year, Jefferson reported an after-tax income of $7 million. Total interest expense was $3,200,000, and the hospital tax rate was 30%. Total assets totaled $70 million, and non-interest-bearing current liabilities were $22,800,000. The required rate of return established by Jefferson is equal to 18% of invested capital. What is the residual income of Jefferson Memorial Hospital?CarniTrin is a manufacturer of Carnival costumes in a highly competitive market. The company's management team is seeking guidance on the use of financial performance measures to identify the key drivers of the company's financial performance and develop a strategy to improve it. The following data relate to the company for the year 2022: In its clothing division, the company has $6,000,000 invested in assets. After-tax operating income from sales of clothing in 2022 is $900,000. Income for the clothing division has grown steadily over the last few years. The cosmetics division has $14,000,000 invested in assets and an after-tax operating income in 2022 of $1,900,000. The weighted-average cost of capital for CarniTrin is 10% and the 2021’s after-tax return on investment for each division was 15%. The general manager of CarniTrin has asserted that in the future, managers should have their compensation structure aligned with their performance measures with no fixed salaries. However,…CarniTrin is a manufacturer of Carnival costumes in a highly competitive market. The company's management team is seeking guidance on the use of financial performance measures to identify the key drivers of the company's financial performance and develop a strategy to improve it. The following data relate to the company for the year 2022: In its clothing division, the company has $6,000,000 invested in assets. After-tax operating income from sales of clothing in 2022 is $900,000. Income for the clothing division has grown steadily over the last few years. The cosmetics division has $14,000,000 invested in assets and an after-tax operating income in 2022 of $1,900,000. The weighted-average cost of capital for CarniTrin is 10% and the 2021’s after-tax return on investment for each division was 15%. The general manager of CarniTrin has asserted that in the future, managers should have their compensation structure aligned with their performance measures with no fixed salaries.…