Refer to Scenario 16

question 71

Multiple Choice

Refer to Scenario 16.2. If State Farm were to decide that its previous method of appropriating the advertising budget was ineffective, it could decide to allocate 2 percent of its total annual sales to advertising. However, one problem with this method is that

• A) it makes the bookkeeping too difficult.
• B) it is tied too closely to sales forecasts.
• C) a sales decline leads to an increase in the advertising appropriation.
• D) a drop in sales would cause a drop in the advertising budget.
• E) competitors may have different advertising objectives.

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Definitions:

Critical Thinking

The active and skilled process of conceptualizing, applying, analyzing, synthesizing, and evaluating information to reach an answer or conclusion.

Cherished Beliefs

Deeply held convictions or values that are central to one's identity or perspective.

Reasons

Logic or explanations provided to justify or explain a belief, action, or conclusion, differing from the previous mention by focusing on the rationale itself.

Global High-Tech

Refers to industries and companies operating in the advanced technology sector on a worldwide scale.