Maxim Computer has a 10 percent of a $250 billion market.Maxim is the low-cost leader and realizes a 20% margin on sales,and marketing,sales,and administrative expenses equaling 10% of sales.What is Maxim's net marketing contribution?

Question

Quizplus · Accepted Answer

Maxim's net marketing contribution is calculated as follows:Sales = 10% of $250 billion = $25 billionMargin on sales = 20%Net marketing contribution = Sales x Margin on sales - Marketing, sales, and administrative expenses= $25 billion x 20% - $25 billion x 10%= $5 billion

Maxim Computer Has a 10 Percent of a $250 Billion