A Retailer Wants to Run an Ad Announcing That the New

question 90

Multiple Choice

A retailer wants to run an ad announcing that the new Harry Potter book will be available at the store next Saturday.There are two newspapers in the community in which the retailer operates.An ad in Newspaper A will cost $500,and an ad in Newspaper B will cost $375.Newspaper A has a circulation of 10,000,and Newspaper B has a circulation of 8,000.After calculating the CPM,you know:

• A)Newspaper A is the more cost-effective buy
• B)both newspapers are equally cost-effective
• C)Newspaper B is the more cost-effective buy
• D)neither newspaper is cost-effective For the most cost-effective buy: ($500/10,000)x 1,000= $50.For both newspapers an equally cost-effective buy: ($375)/8,000)x 1,000 = $46.875

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Definitions:

Line Item

A specific and individual entry recorded in a financial statement or budget that represents income, expense, asset, or liability.

Closing Inventories

The total value of goods available for sale at the end of an accounting period, recorded on the balance sheet.

Non-Controlling Interests

The portion of equity in a subsidiary not attributable directly or indirectly to the parent company, sometimes referred to as minority interest.

Retained Earnings

Profits that a company retains for reinvestment in its operations, rather than distributing to shareholders as dividends.