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WSR Inc.
WSR Inc. sells a variety of drink and food products including potato chips and soft drink. The segmented income statements for these two products are as follows:
WSR’s management is considering a special advertising campaign that will run during a major sporting event. The advertising campaign is expected to cost $30 000 and only one product can be featured. In-house marketing studies show that the campaign could increase sales of the soft drink division by $200 000 or increase sales of the chips division by $275 000.
-What will be the overall net effect on the company's total profits if the advertising focuses on soft drink?
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