Question

Last year’s sales were $9,815,000 and are projected to increase by 4.5% for next year. Last year’s expenses were 41% of last year’s sales and are projected to decrease by 1.5% for next year. Last year the business earned a profit of $4,587,600. Profit is expected to increase by 2% over last year’s figures. Based on the last year’s figures and the projected changes in sales, expenses and profit, calculated forecasted sales, expenses and profits for the upcoming year. Calculate the amount left to spend on advertising.

Answer 1

Answer:

t oadvertize there is 1,435,164.80   dollars available.

Explanation:

Sales: 9,815,000 x (1 + 4.5%)  =  10,256,675.00

general expenses are 41% of sales but will decay by 1.5%

10,256,675 x (0.41) x (1 - 0.015) =  4,142,158.20  

Profit will increase by 2%

4,587,600 x (1 + 2%) = 4,679,352

The amount available for advertizing spending is the difference between sales and the cost and profit:

sales - expenses - advertizing = profit

sales - expenses - profit = advertizing

advertizing = 10,256,675.00  - 4,142,158.20    - 4,679,352

advertizing = 1,435,164.80