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Images.com is a small Internet retailer of high-quality posters. The company has $730,000 in operating assets and fixed expenses of $160,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $4.9 million per year. The company,s contribution margin ratio is 9%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 9 cents. 1. Complete the following table showing the relationship between sales and return on investment (ROI). 2. What happens to the company's return on investment (ROI) as sales increase?

Images.com is a small Internet retailer of high-quality posters. The company has $730,000 in operating assets and fixed expenses of $160,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $4.9 million per year. The company,s contribution margin ratio is 9%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 9 cents. 1. Complete the following table showing the relationship between sales and return on investment (ROI). 2. What happens to the company's return on investment (ROI) as sales increase?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Images.com is a small Internet retailer of high-quality posters. The company has $730,000 in operating assets and fixed expenses of $160,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $4.9 million per year. The company,s contribution margin ratio is 9%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 9 cents. 1. Complete the following table showing the relationship between sales and return on investment (ROI). 2. What happens to the company's return on investment (ROI) as sales increase?
Transcribed Image Text:Images.com is a small Internet retailer of high-quality posters. The company has $730,000 in operating assets and fixed expenses of $160,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $4.9 million per year. The company,s contribution margin ratio is 9%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 9 cents. 1. Complete the following table showing the relationship between sales and return on investment (ROI). 2. What happens to the company's return on investment (ROI) as sales increase?
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