Advertising Financial Services: Return on Investment A financial services company wants to sell an actively managed investment fund through a newspaper advertising campaign. In order to estimate ROI, the company has arrived at the following forecasts. (1) Value of customer. Value of customer is an estimation of the total profit that an acquired customer represents to the company. The company estimates that the average acquired customer will buy the fund and pay euro 700/year in management fees, and hold it for five years. (2) Reach. Reach is an estimation of the total number of consumers who will be exposed tothe advertising campaign at least once. The forecast is that 250,000 people will be exposed to thecampaign. (3) Conversion rate. The conversion rate is the percentage of reached customers whowill purchase the advertised financial product. Based on past campaigns, management estimatesthat 1 in every 1,000 individuals will buy the fund. (4) Cost. Finally, the total advertising campaignexpenditure is set at 625,000. Questions: (a) Calculate ROI (return on investment) with the estimations provided. (b) Should go ahead with the project? (c) The company is worried about competition from passively managed fund, which puts downward pressure on management fees. At what level of the annual management fee paid by the average customer would ROI equal zero