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Stewart ROI Homework Stewart Medical Supplies sales have been the same, at $20 million per year, for years. The I company has also been using
Stewart ROI Homework Stewart Medical Supplies sales have been the same, at $20 million per year, for years. The I company has also been using a marketing budget of 2% of sales for years and focuses on print ads and trade shows. About a year ago, a marketing manager advocated for increasing the marketing spend to 3% of the previous year's sales and so spending has increased to this level for about a year. The focus of the spend has remained on print ads and trade shows. With this increase in spending, it looks like sales will increase this year to $23 million. The margin on sales is 20%. a. What is the ROI on the increase in the marketing spending? b. Suppose next year the company increases their spending to 4% of sales and the focus remains on print ads and trade shows. Other than possible changes in the market environment, would you expect the ROI to be higher, lower, or unchanged from the ROI on the increase from 2% to 3%? Why
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