A Company's Fixed Marketing Administrative Expense Was Estimated to Be

question 7

Multiple Choice

A company's fixed marketing administrative expense was estimated to be $12 million.It has retained 245,000 customers and has acquired 36,000 new customers.The acquisition cost per customer is 10 times more than the retention cost per customer.If the retention cost per customer is $180,calculate the marketing and sales budget of the company.

• A)$236.6 million
• B)$338.4 million
• C)$183.9 million
• D)$120.9 million
• E)$85.8 million

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Definitions:

Crowding In

The potential for government spending to stimulate private investment in an otherwise dead economy.

Private Investment

Expenditure on capital by private sector firms or individuals, not including governmental spending.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, typically measured by the rise in GDP.

Government Borrowing

The process by which a government obtains funds from the private sector or other countries, typically through issuing securities.