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Apex Motors Manufactures Luxury Cars and Sport Utility Vehicles

question 54

Multiple Choice

Apex Motors manufactures luxury cars and sport utility vehicles. The most likely customers are high-income men and women, and company managers want to initiate an advertising campaign targeting these groups. They plan to run 1-minute spots on business/investment programs, where they can reach 7 million women and 4 million men from their target groups. They also plan 1-minute spots during sporting events, where they can reach 2 million women and 12 million men from their target groups. Apex feels that the ads must reach at least 32 million women and at least 20 million men who are prospective customers. Let x represent the number of minutes of business/investment program commercials and y represent the number of minutes of sporting events commercials. Graph the region determined by the constraint inequalities.

Definitions:

Dividend Discount Model

A method of valuing a company's stock price by using predicted dividends and discounting them back to present value.

Myron Gordon

An economist best known for developing the Gordon Growth Model, which is used to determine the intrinsic value of a stock based on a future series of dividends that grow at a constant rate.

Burton Malkiel

An American economist and writer, most famous for his classic finance book "A Random Walk Down Wall Street."

Dividend Discount Model

A valuation method used to estimate the value of a stock by discounting predicted dividends to their present value.