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(Solved): Posters.com is a small Internet retailer of high-quality posters. The company has $860,000 in oper ...
Posters.com is a small Internet retailer of high-quality posters. The company has in operating assets and fixed expenses of per year. With this level of operating assets and fixed expenses, the company can support sales of up to per year. The company's contribution margin ratio is , 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 relation between sales and return on investment (ROI). 2. What happens to the company's return on investment (ROl) as sales increase? Complete this question by entering your answers in the tabs below. Complete the following table showing the relation between sales and return on investment (ROI). (Round your percentage answers to 2 decimal places.)
Expert Answer
Answer 1) Firstly, let us understand the meaning of return on investment (ROI). Return on investment is a very useful and important financial ratio as it helps the investors in comparing two or more investments. It is generally taken as a percentage. ROI is calculated by taking the ratio of net income and cost of investment. Firstly, let us understand the meaning of return on investment (ROI). Return on investment is a very useful and important financial ratio as it helps the investors in comparing two or more investments. It is generally taken as a percentage. ROI is calculated by taking the ratio of net income and cost of investment.