In making a decision about whether to increase its advertising budget the firm management should not consider
A)the added revenue from increased sales.
B)the added cost of producing more goods for sale.
C)interest payments on the firm's loan.
D)the cost of the increased advertising.

Question

Quizplus · Accepted Answer

Interest payments on the firm's loan are not directly related to the decision of whether to increase the advertising budget. The decision should be based on the potential added revenue from increased sales compared to the cost of the increased advertising. The cost of producing more goods for sale should also be considered, as it affects the firm's profitability.

In Making a Decision About Whether to Increase Its Advertising