COST ACCOUNTING
INFORMATION FOR DECISION MAKING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
Solve the problem.You have 1 million rubles available for you to invest in the development of a new product or to conduct an advertising campaign for an existing product.In the case of a successful advertising campaign with a probability of 60%, you will receive 3 million profits, otherwise, only 1 million rubles.For a new product, the probability distribution and expected profit:4 million rubles with a probability of 20%, otherwise 2 million rubles.Choose an investment option
|
|
development of a new product
|
|
|
advertising campaign
|
Explanation:
Detailed explanation-1: -Calculating Simple ROI You take the sales growth from that business or product line, subtract the marketing costs, and then divide by the marketing cost. So, if sales grew by $1, 000 and the marketing campaign cost $100, then the simple ROI is 900%.
Detailed explanation-2: -Decisions are made under the condition of certainty when the manager has perfect knowledge of all the information needed to make a decision. This condition is ideal for problem solving.
Detailed explanation-3: -Marketing ROI Formular [((number of leads x lead-to-customer rate x average sales price)-cost or ad spend) รท cost or ad spend] x 100.
There is 1 question to complete.