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Posters.com is a small Internet retailer of high-quality posters. The company has $720,000 in operating...

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Accounting

Posters.com is a small Internet retailer of high-quality posters. The company has $720,000 in operating assets and fixed expenses of $163,000 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 11%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 11 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?

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