Question
Posters.com is a small Internet retailer of high-quality posters. The company has $800,000 in operating assets and fixed expenses of $165,000 per year. With this
Posters.com is a small Internet retailer of high-quality posters. The company has $800,000 in operating assets and fixed expenses of $165,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $4,700,000 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 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 income Average operating assets ROI%
4200000 390000 800000 ?
4300000 ? 800000 ?
4400000 ? 800000 ?
4500000 ? 800000 ?
4600000 ? 800000 ?
4700000 ? 800000 ?
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