Images.com is a small Internet retailer of high-quality posters. The company has
ID: 2369747 • Letter: I
Question
Images.com is a small Internet retailer of high-quality posters. The company has Dollars 800,000 in operating assets and fixed expenses of Dollars 160,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to Dollars 5 million per year. The company's contribution margin ratio is 10%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 10 cents. Required: Complete the following table showing the relationship between sales and return on investment (ROI). (Round your percentage answers to 2 decimal places. Omit the "Dollars" and "%" signs in your response.) What happens to the company's return on investment (ROI) as sales increase? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)Explanation / Answer
the company;s ROI increase by 1.25 % as sales increase