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As a marketing manager for one of the world's largest automakers, you are responsible for the advertising campaign for a new energy-efficient sports...

This question was answered on Jan 12, 2013. View the Answer
can someone please assist with my managerial economics problem and thank you in advance for your assistance
16. As a marketing manager for one of the world’s largest automakers, you are responsible for the advertising campaign for a new energy-efficient sports utility vehicle. Your support team has prepared the following table, which summarizes the (year-end) profitability, estimated number of vehicles sold, and average estimated selling price for alternative levels of advertising. The accounting department projects that the best alternative use for the funds used in the advertising campaign is an investment returning 10 percent. In light of the staggering cost of advertising (which accounts for the lower projected profits in years 1 and 2 for the high and moderate advertising intensities), the team leader recommends a low advertising intensity in order to maximize the value of the firm. Do you agree? Explain. Profitability by Advertising Intensity Profit s (in Millio ns) Units Sold (in Thous ands) Average Selling Price Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 Advertising Intensity High $ 15 $ 90 $ 270 10 60 1 20 $ 24,000 $ 25,500 $ 26,000 Moderate $ 30 $ 75 $ 150 5 12. 5 25 $ 24,500 $ 24,750 $ 25,000 Low $ 70 $ 105 $ 126 4 6 7 .2 $ 24,800 $ 24,850 $ 24,900
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Sorry my mistake its an easy one.... View the full answer

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As a marketing manager for one of the world’s largest automakers, you are responsible for the
advertising campaign for a new energy-efficient sports utility vehicle. Your support team has...

This question was asked on Jan 11, 2013 and answered on Jan 12, 2013.

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