A local dental practice decides to run a Groupon campaign. The campaign offered $350 worth of dental services (such as teeth whitening) for $145. For the total campaign, 230 coupons were sold. We estimate that 85% of the coupons will be redeemed, that 35% of the coupons will be redeemed by existing customers and that, on average, Groupon customers purchased 1.5 coupons. Let's assume that 25% of new customers come back after the Groupon coupon visit. The dental practice estimates its cost of goods sold to be 60%. Finally, the bill for the average Groupon customer was $380. The dental practice negotiated a 50/50 split with Groupon. Calculate the Groupon campaign profit/loss (+/-). Your Answer: Answer
A local dental practice decides to run a Groupon campaign. The campaign offered $350 worth of dental services (such as teeth whitening) for $145. For the total campaign, 230 coupons were sold. We estimate that 85% of the coupons will be redeemed, that 35% of the coupons will be redeemed by existing customers and that, on average, Groupon customers purchased 1.5 coupons. Let's assume that 25% of new customers come back after the Groupon coupon visit. The dental practice estimates its cost of goods sold to be 60%. Finally, the bill for the average Groupon customer was $380. The dental practice negotiated a 50/50 split with Groupon. Calculate the Groupon campaign profit/loss (+/-). Your Answer: Answer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A local dental practice decides to run a Groupon campaign. The campaign offered
$350 worth of dental services (such as teeth whitening) for $145. For the total
campaign, 230 coupons were sold. We estimate that 85% of the coupons will be
redeemed, that 35% of the coupons will be redeemed by existing customers and
that, on average, Groupon customers purchased 1.5 coupons. Let's assume that 25%
of new customers come back after the Groupon coupon visit. The dental practice
estimates its cost of goods sold to be 60%. Finally, the bill for the average Groupon
customer was $380. The dental practice negotiated a 50/50 split with Groupon.
Calculate the Groupon campaign profit/loss (+/-).
Your Answer:
Answer
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