Scenario 12-2 When Advertisers Consider Running Ads in American Life Magazine, They

question 41

Multiple Choice

Scenario 12-2
When advertisers consider running ads in American Life magazine, they have the option of buying geographic and demographic editions as well as the national edition.For instance, they can choose from editions targeted at professionals and managers, homeowners, working women, and people aged 50 and older.In addition, they are offered editions for 8 geographical regions and for the top 20 metropolitan areas.American Life also offers multiple-page discounts for advertisers buying four or more consecutive pages in any one edition, as well as other volume discounts.The basic rate to reach 2,847,600 readers in its national edition with a full-page, four-color advertisement is $91,300.The basic rate to reach the same 2,847,600 nationwide readers with a single-column, black-and-white ad is $31,300.
-(Scenario 12-2) Based on the figures provided, what is the CPM of a single-page, full-color advertisement in American Life's national edition?

• A)$ 10.99
• B)$ 31.19
• C)$ 32.06
• D)$ 90.98

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Definitions:

Real Interest Rates

The interest rate adjusted for inflation, reflecting the true cost of borrowing or the true yield on an investment.

Present Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.

Nominal Interest Rates

The interest rate before adjustments for inflation, representing the face value of borrowing costs.

Inflation Rate

How quickly the average cost of products and services goes up, causing the ability to purchase to decline.