Imagescom is a small internet retailer of high-quality

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Reference no: EM13581415

Images.com is a small Internet retailer of high-quality posters. The company has $750,000 inoperating 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 $5.3 millionper year. The company's contribution margin ratio is 9%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 9 cents.

Required:
1.	Complete the following table showing the relationship between sales and return on investment (ROI). (Round your percentage answers to 2 decimal places. Omit the "$" and "%" signs in your response.)

Sales	Net Operating Income	Average Operating Assets	ROI
$4,800,000	$267,000	$750,000	%
$4,900,000	$	$750,000	%
$5,000,000	$	$750,000	%
$5,100,000	$	$750,000	%
$5,200,000	$	$750,000	%
$5,300,000	$	$750,000	%

2.	What happens to the company's return on investment (ROI) as sales increase? (Round youranswer to 2 decimal places. Omit the "%" sign in your response)

ROI

(Click to select)increases bywill not changedecreases by

Reference no: EM13581415

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