A U.S.-based manufacturer of sunscreen is contemplating using funds to purchase courtside advertising at major tennis matches such as the French Open and the Australian Open. Advertising at such well viewed international events will then raise the domestic sales of the manufacturers products. Which of the following factors is the most relevant when analyzing this decision?
A) the cost of the machine used to produce the sunscreen
B) the manufacturing process of the sunscreen
C) the cost of the existing advertising campaign
D) the cost of the courtside advertising at the tennis matches

Question

Quizplus · Accepted Answer

The cost of the courtside advertising at the tennis matches is the most relevant factor as it directly affects the manufacturer's decision and potential return on investment. The cost of the machine used to produce the sunscreen and the manufacturing process are not relevant as they do not impact the decision to invest in advertising. The cost of the existing advertising campaign may be relevant in comparison to the potential return on investment from the new courtside advertising, but it is not the most relevant factor.

A US-Based Manufacturer of Sunscreen Is Contemplating Using Funds to Purchase