A small, new business by the name of Shivani's Fine Foods has been profitable for the last few months. It is a specialty foods store. The owner, Shivani, has decided to allocate some money towards marketing. She knows that this will increase her expenses, but she expects that her expenditure in marketing will generate more sales and possibly higher profit margins in the future.

Shivani needs some advice on whether her business can afford to have a marketing expense next month while still generating a profit. She was advised to put 8% of her sales toward marketing. Below is a list of projected revenues and expenses for Shivani's Fine Foods. Sales Revenue: $250,000 Cost of Goods Sold: $95,000

Utilities: $6,000 Wages: $80,000 Rent: $22,600 Insurance: $7,000 Loan Payments: $3,500 Interests: $4,400 Instructions

Prepare Shivani's Fine Foods budget for next month without including the marketing expense. Use an appropriate software. Find the projected net income. Calculate the cost of marketing. Explain whether Shivani's Fine Foods has room to include the marketing cost in its expenses while still keeping the business's goals in mind. If the projected net income before the marketing expense was $20,000, would you recommend that Shivani go ahead with the marketing expense? Why or why not? If the projected net income before the marketing expense was $15,000, would you recommend that Shivani go ahead with the marketing expense? Why or why not?