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Apple and Google sell a variety of products. Some products are more profitable than others. Teams of employees in each company make advertising, investment, and
Apple and Google sell a variety of products. Some products are more profitable than others. Teams of employees in each company make advertising, investment, and product mix decisions. Assume a typical ad costs $800,000 and that the average product for both Apple and Google sells for $400 per unit and generates a contribution margin of 20%. Required 1. Estimate how many additional products this ad must sell to justify its cost. 2. If instead Google targets its advertising towards products with contribution margins of 25% or higher, and all other information is unchanged, estimate how many additional products this ad must sell to justify its cost. 1. Additional products to justify its cost 2. Additional products to justify its cost
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