Scenario 16-1 MakeWaves Is a Promotional Company with a Website That Offers

question 55

Multiple Choice

Scenario 16-1
MakeWaves is a promotional company with a website that offers the opportunity to sponsor a yacht in Grand Prix yacht racing.Commercial sponsors of the WaveRunner yacht can buy space for logos and graphics on the WaveRunner's sails, hulls, crew member uniforms, and trailer.For enough sponsorship money, the WaveRunner will even change its name to better fit the sponsor.The WaveRunner is scheduled to compete in five Grand Prix yacht-racing events every year.MakeWaves claims on its website that sponsoring the WaveRunner in a race could result in millions of impressions in sailing magazines and newspapers as well as on broadcast media, and offers specific calculations to those who inquire.
-(Scenario 16-1) How would an advertiser hope to benefit from sponsoring the WaveRunner?

• A)by avoiding the ego-driven decision making often associated with traditional advertising
• B)by strategically placing its product at a sporting event to reach as wide an audience as possible
• C)by taking part in the most cost-efficient form of promotion and advertising
• D)by transferring consumers' positive feelings about yacht racing to the product

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Definitions:

Asset

Resources owned or controlled by a business that are expected to provide future economic benefits.

Original Cost

The initial price paid or cost of acquisition of an asset, before any depreciation, amortization, or impairment costs are deducted.

Increased Revenues

A rise in the amount of money a company earns from its business activities over a certain period.

Fixed Costs

Costs that do not change with the level of production or sales activities, such as rent, salaries, and insurance premiums.