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 $820,000 in operating assets and fixed expenses of $157,000 per year. With this

Posters.com is a small Internet retailer of high-quality posters. The company has $820,000 in operating assets and fixed expenses of $157,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $5,400,000 per year. The companys contribution margin ratio is 10%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 10 cents.

Required:

1. Complete the following table showing the relation between sales and return on investment (ROI).

2. What happens to the companys return on investment (ROI) as sales increase?

image text in transcribedimage text in transcribed

5 Posters.com is a small Internet retailer of high-quality posters. The company has $820,000 in operating assets and fixed expenses of $157,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $5,400,000 per year. The company's contribution margin ratio is 10%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 10 cents. 3 points 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? eBook Complete this question by entering your answers in the tabs below. References Required 1 Required 2 Complete the following table showing the relation between sales and return on investment (ROI). (Round your percentage answers to 2 decimal places.) Sales Net Operating ROI Average Operating Assets Income % $ 4,900,000 $ 333,000 $ 820,000 % $ 820,000 % $ 820,000 % $ 5,000,000 $ 5,100,000 $ 5,200,000 $ 5,300,000 $ 5,400,000 820,000 % $ 820,000 % $ 820,000 % Posters.com is a small Internet retailer of high-quality posters. The company has $820,000 in operating assets and fixed expenses of $157,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $5,400,000 per year. The company's contribution margin ratio is 10%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 10 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? O Increases O Decreases

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

Step: 3

blur-text-image

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

Accounting And Finance For Non-Specialists

Authors: Eddie McLaney, Peter Atrill

11th Edition

1292244011, 9781292244013

More Books

Students also viewed these Accounting questions