Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

Exercise 11

You are the manager in charge of global operations at BankGlobal-a large commercial bank that operates in a number of countries around the world. You must decide whether or not to launch a new advertising campaign in the U.S. market. Your accounting department has provided the accompanying statement, which summarizes the financial impact of the advertising campaign

on U.S. operations. In addition, you recently received a call from a colleague in charge of foreign operations, and she indicated that her unit would lose $8 million if the U.S. advertising campaign were launched. Your goal is to maximize BankGlobal's value. Should you launch the new campaign? Explain.