Question

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?Explain.


$1.99
Sales2
Views385
Comments0
  • CreatedMay 20, 2014
  • Files Included
Post your question
5000