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 $ 920,000 Net operating income $ 34,040 Average operating assets $ 100,000

Answer 1

Answer:

34.04%

Explanation:

Data provided :

Total sales of the Springfield Club = $ 920,000

The net operating income of the company = $ 34,040

The average operating assets of the company = $ 100,000

now,

The return on investment will be calculated as:

Return on investment (ROI)= $\frac{\textup{Net operating income}}{\textup{Average operating assets}}$

on substituting the values, we get

ROI = $\frac{\ \ 34,040}{\ \ 100,000}$

or

ROI = 34.04%