Question
The smartphone-manufacturing company ZEA Mobile Limited wants to increase their sales. The company has hired a consultant for conducting market research and identifying ways to
The smartphone-manufacturing company ZEA Mobile Limited wants to increase their sales. The company has hired a consultant for conducting market research and identifying ways to increase the sales. The consultant suggested the following options: Option 1: Launch a brand awareness campaign in all the zones, including ads in television / newspaper / social media, tie-ups with social media influencers, etc. to recreate the brand image through brand ambassadors. Option 2: Launch a sales campaign in the top four metro cities by aggressively targeting customers through discounts and newspaper ads. ZEA has to select a campaign by considering the impact on sales and the initial cost associated with the campaigns. Both campaigns will have different impacts on the sales. The monthly cash flows are shared below. Monthly interest rate is 2.5%. Month 0 Month 1 Month 2 Month 3 Month 4 Month 5 Option 1: Brand Campaign -2,00,00,000 42,50,000 48,02,500 54,16,625 60,98,856 68,56,339 Option 2: Sales Campaign -20,00,000 8,50,000 9,45,200 10,50,736 - - Calculate the NPV of option 1.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started