1- Product-line Analysis. What if a marketing budget of $750,000 would gain 8 points of share and 80% of the estimated product item share of growth. What would now be the new marginal gain in pretax profit?

2-

			Table 1
	Investment Forecast Incremental Cash Flow/Profit						RRR =	20%
Year	0	1	2	3	4	5	NPV	IRR
Marketing Mix:
Consumer Advertising	($100,000)	$100,000	$20,000	$10,000	$0	$0	$3,009	23%
Trade Advertising	($100,000)	$80,000	$40,000	$20,000	$10,000	$0	$10,841	28%
Publicity campaign	($100,000)	$60,000	$40,000	$40,000	$20,000	$20,000	$18,609	30%
Salesforce training	($100,000)	$50,000	$60,000	$50,000	$40,000	$40,000	$47,634	41%
Sales promotions	($100,000)	$120,000	$10,000	$10,000	$10,000	$10,000	$21,573	39%
Packaging redesign	($100,000)	$0	$60,000	$60,000	$50,000	$50,000	$20,595	27%
Product redesign	($100,000)	$0	$80,000	$80,000	$70,000	$60,000	$59,722	40%

A)the sales promotion people say that their last short-term promotion campaign led to new trial and permanent switching of buyers of competitive products to our brand and that the enduring effect in years 2-5 should be assumed to be 20% of the first year Cash Flow/Profits. What is the new IRR under this assumption?

B) S6 Marketing Mix Analysis. Senior management is instructed by the board that shareholderRRR is 15%. Under this assumption how much shareholder capital does a product redesign create?