Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribedimage text in transcribedimage text in transcribed

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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following table showing the relation between sales and return on investment (ROI). (Round your percentage answers to 1 decimal place.) Sales Net Operating Income Average Operating Assets ROI $ 2,500,000 $ 475,000 $1,000,000 % $ 2,600,000 $ 1,000,000 % $ 2,700,000 $ 1,000,000 % $ 2,800,000 $ 1,000,000 % $ 2,900,000 $ 1,000,000 % $ 3,000,000 $ 1,000,000 %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction to Governmental and Not for Profit Accounting

Authors: Martin Ives, Terry K. Patton, Suesan R. Patton

7th edition

9780132776073, 132776014, 978-0132776011

More Books

Students also viewed these Accounting questions

Question

Contrast Adlers and Freuds approaches to motivation.

Answered: 1 week ago

Question

What is the meaning of night audit? How is it useful for hotels?

Answered: 1 week ago

Question

What is accounts transfer?

Answered: 1 week ago