Posters.com is a small Internet retailer of high-quality posters. The company has $850,000 in operating assets and fixed expenses of $165,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $4,900,000 per year. The company's contribution margin ratio is 12%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 12 cents. Required: 1. Complete the following table showing the relation between sales and return on investment (ROI). 2 What hannens to the compa return on investment (ROILas sales increase?
Posters.com is a small Internet retailer of high-quality posters. The company has $850,000 in operating assets and fixed expenses of $165,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $4,900,000 per year. The company's contribution margin ratio is 12%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 12 cents. Required: 1. Complete the following table showing the relation between sales and return on investment (ROI). 2 What hannens to the compa return on investment (ROILas sales increase?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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10hw-1

Transcribed Image Text:Posters.com is a small Internet retailer of high-quality posters. The company has $850,000 in operating assets and fixed expenses of
$165,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $4,900,000 per
year. The company's contribution margin ratio is 12%, which means that an additional dollar of sales results in additional contribution
margin, and net operating income, of 12 cents.
Required:
1. Complete the following table showing the relation between sales and return on investment (ROI).
2 What happens to the company's return on investment (ROI) as sales increase?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
What happens to the company's return on investment (ROI) as sales increase?
Olncreases
ODecreases
< Required 1
Recuired 2
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