Posters.com is a small Internet retailer of high-quality posters. The company ha

Question

Posters.com is a small Internet retailer of high-quality posters. The company has $900,000 in operating assets and fixed expenses of $168,000 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 8%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 8 cents. Complete the following table showing the relation between sales and return on investment (ROI). (Round your percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

Explanation / Answer

sales net operating average operating asset ROI 4400000 184000 900000 20.44% 4500000 192000 900000 21.33% 4600000 200000 900000 22.22% 4700000 208000 900000 23.11% 4800000 216000 900000 24.00% 4900000 224000 900000 24.89%

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