Figure 9-8 -The Dairy Farmers of Canada Engaged in a Nationwide Advertising

question 119

Multiple Choice

Figure 9-8

-The Dairy Farmers of Canada engaged in a nationwide advertising program that highlighted the benefits of consumer chocolate milk after exercising. After the program was aired, chocolate milk sales increased significantly. What fundamental business decision was likely made that caused the resulting increase in sales?

• A)repositioning chocolate milk from a children's drink to an adult's drink
• B)conducting market research on the drinking habits of adults
• C)hiring a creative, adult-focused marketing company
• D)funding academic research on the benefits of chocolate milk

---

Definitions:

Payback Period

The payback period is the length of time required to recover the cost of an investment, calculated by dividing the initial investment by the annual cash inflow.

Discounted Payback

A capital budgeting method that calculates the time needed to recoup investment costs, taking the time value of money into account.

Positive Cash Flows

The situation where a company's cash inflows exceed its cash outflows, indicating financial strength and the ability to finance operations, debt, and investments.

NPV

Net Present Value, a method used in capital budgeting to assess the profitability of an investment or project, calculating the difference between the present value of cash inflows and outflows.