Unilever is a company that produces consumer packaged goods. The company wants to launch a new social media campaign and is contemplating between two options. The first option is to launch the campaign on Instagram, which will cost them $100,000 and bring in an incremental revenue of $300,000. This campaign is estimated to have a margin of 40%. The second option is to launch the campaign on TikTok, which will cost them $30,000 and bring in an incremental revenue of $120,000. The TikTok campaign is estimated to have a margin of 50%. According to this information, if the company only cares about the ROM(%), which option would they end up choosing?
Unilever is a company that produces consumer packaged goods. The company wants to launch a new social media campaign and is contemplating between two options. The first option is to launch the campaign on Instagram, which will cost them $100,000 and bring in an incremental revenue of $300,000. This campaign is estimated to have a margin of 40%. The second option is to launch the campaign on TikTok, which will cost them $30,000 and bring in an incremental revenue of $120,000. The TikTok campaign is estimated to have a margin of 50%. According to this information, if the company only cares about the ROM(%), which option would they end up choosing?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Unilever is a company that produces consumer packaged goods. The company wants to launch a new social media campaign and is contemplating between two options. The first option is to launch the campaign on Instagram, which will cost them $100,000 and bring in an incremental revenue of $300,000. This campaign is estimated to have a margin of 40%. The second option is to launch the campaign on TikTok, which will cost them $30,000 and bring in an incremental revenue of $120,000. The TikTok campaign is estimated to have a margin of 50%. According to this information, if the company only cares about the ROM(%), which option would they end up choosing?
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