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 can be calculated by dividing the change in sales revenue by the change in marketing effort.

Change in sales revenue = $20 million - $10 million = $10 million 
Change in marketing effort = $5 million - $3 million = $2 million

Ratio of incremental sales revenue to incremental marketing effort = Change in sales revenue / Change in marketing effort 
= $10 million / $2 million 
= 5

Therefore, the ratio is 5:1, which is option C.

Have Been Told That a Company Increased Its Marketing Effort