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zlopas [31]
3 years ago
6

​GEICO, the​ number-two auto insurer with ​$18 billion in revenue last​ year, spent ​$0.9 billion on advertising that year and p

lans to continue spending the same percentage of sales on advertising next year. The average​ advertising-to-sales ratio for the insurance industry is 0.2 percent of sales. If GEICO projects ​$20 billion in sales next​ year, using the​ percentage-of-sales method of advertising​ budgeting, how much will the company budget for advertising if basing it on projected​ sales?
Business
1 answer:
MAXImum [283]3 years ago
7 0

Answer:

The budget for advertising for the next year will be $1 billion.

Explanation:

Based on the information given in the question, the advertising to sales ratio for GEICO based on its last year data is,

Advertising to sales = Advertising / Sales Revenue

Advertising to sales = 0.9 / 18   =  0.05 or 5%

The advertising to sales ratio for GEICO is much higher than the industry average. If GEICO continues to maintain this ratio for the next year, the budget for advertising will be,

Advertising budget = 20 * 5%   =  $1 billion

If it uses the industry average ratio, the budget will be,

Advertising budget = 20 * 0.2%  = $0.04 billion

As GEICO is expected to maintain its own advertising to sales ratio, the correct answer for advertising budget us $1 billion

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vaieri [72.5K]

Answer:

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Explanation:

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Thus the correct equation is "x_1 \leq 0.35(x_1+x_2+x_3)".

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2 years ago
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NikAS [45]

Answer:

Answer for the question:

Within the food service industry​ (restaurants that serve meals to​ customers, but not just fast​ food), find examples of firms that have sustained competitive advantage by competing on the basis of​ (1) cost​ leadership, (2)​ response, and​ (3) differentiation. Cite one example in each​ category; provide a sentence or two in support of each choice. ​(​Hint: A ​"99cents ​menu" is very easily copied and is not a good source of sustained​ advantage.)

is given in the attachment.

Explanation:

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2 years ago
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umm

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4 0
2 years ago
If assets have decreased by $4,000, or stockholders' equity has increased by $4,000, then total liabilities must have A : increa
patriot [66]

Answer:

C : decreased by $4,000

Explanation:

As we know that

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To balance the balance sheet we use the accounting equation

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3 years ago
Senate Inc. is considering two alternative methods for producing playing cards. Method One involves using a machine with a Fixed
Mazyrski [523]

Answer:

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