You have been told that a company increased its marketing effort from $3 million to $5 million,resulting in increased sales revenue from $10 million to $20 million.Calculate the company's ratio of incremental sales revenue to incremental marketing effort.

Question

Quizplus · Accepted Answer

The ratio of incremental sales revenue to incremental marketing effort = [(New sales − Old sales)÷ (New marketing effort − Old marketing effort)] = [(20 − 10)÷ (5 − 3)] = 10 ÷ 2 or a ratio of 5:1.

You Have Been Told That a Company Increased Its Marketing