Posters.com is a small Internet retailer of high-quality posters. The company has $1,000,000 in operating assets and fixed expenses of $ 150,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $ 3,000,000 per year. The company€™s contribution margin ratio is 25%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 25 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?Explain.

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Net Operating Income Average Operating Assets $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 Sales ROI $2,500,000 $2,600,000 $2,700,000 $2,800,000 $2,900,000 $3,000,000 $475,000