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Posters.com is a small Internet retailer of highquality posters. The company has $710,000 in operating assets and fixed expenses of $153,000 per year. With this

Posters.com is a small Internet retailer of highquality posters. The company has $710,000 in operating assets and fixed expenses of $153,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $5,100,000 per year. The companys contribution margin ratio is 11%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 11 cents.

Required:

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).)

Sales

Net Operating

Average Operating

ROI

Income

Assets

%

$ 4,600,000

$ 353,000

$ 710,000

%

$ 4,700,000

$ 710,000

%

$ 4,800,000

$ 710,000

%

$ 4,900,000

$ 710,000

%

$ 5,000,000

$ 710,000

%

$ 5,100,000

$ 710,000

%

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

Increases

Decreases

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