14.

Images.com is a small Internet retailer of high-quality posters. The company has $870,000 in operating assets and fixed expenses of $162,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $5.2 million per year. The companys 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 relationship between sales and return on investment (ROI): (Round your percentage answers to 2 decimal places.)

Sales	Net Operating Income	Average Operating Assets	ROI
$ 4,700,000	$ 402,000	$ 870,000	%
$ 4,800,000	$	$ 870,000	%
$ 4,900,000	$	$ 870,000	%
$ 5,000,000	$	$ 870,000	%
$ 5,100,000	$	$ 870,000	%
$ 5,200,000	$	$ 870,000	%

2.	What happens to the company's return on investment (ROI) as sales increase? (Round your answer to 2 decimal places.)

ROI

(Click to select)will not changedecreases byincreases by

%

rev: 04_28_2015_QC_CS-14556