Answer:
Old ROI = 25.5%
New ROI = 28.9%
Step-by-step explanation:
Current ROI = Net operating Income/Average Operating Assets
= ($ 25,500 /$ 100,000) *100%
= 25.5%
Assume manager of the club reduce expenses by $3,400 and variables remained unchanged.
New Net Operating Income = $25,500 + $3,400
= $28,900
Hence, New ROI = ($28,900/100,000) *100%
=28.9%