You Have Been Told That a Company Increased Its Marketing

question 50

Multiple Choice

You have been told that a company increased its marketing effort from $3 million to $5 million,resulting in increased sales revenue from $10 million to $20 million.Calculate the company's ratio of incremental sales revenue to incremental marketing effort.

• A)4:1
• B)1:5
• C)5:1
• D)1:4
• E)5:1.5

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Definitions:

Useful Life

The period of time over which an asset is expected to be useful in the operations of a business.

Traceable Fixed Expense

A fixed expense that can be directly linked to a specific department, project, or segment of a business.

Net Operating Income

The amount of profit realized from a company's operations after subtracting operating expenses but before interest and taxes.

Price Hike

An increase in the selling price of goods or services, often due to higher costs or improved demand.