You are hired as a marketing manager to improve business performance of a local health supplement chain. You recommend increasing the social media budget to increase sales.

You estimate that Revenue/sales will grow at a 7% increase every year if the social media budget is increased 8% every year for the next 3 years.

Using the following information in the assumption area, please create a 3-year projected income statement template for scenario analysis to give answers to next questions.

You may copy and paste the following into Your Name Excel workbook and name this as a second worksheet Income.

Assumption Area	Current Year	New Plan with Social Media
	(in thousands)	Growth rate every year
Sales	$ 8,766.0	7%
Cost of Goods Sold as a Percentage of Sales	39%
Gross Profit
Marketing Mix Expenses:	(000's)
Social Media	$ 235.0	8%
Production Costs	$ 45.0
Promotion Costs	$ 37.0
Selling	$ 37.0
Total marketing mix expenses
	(000's)
Fixed Costs	$ 4,723.0

Please type your numeric answer in the space at the end of each question.

A. The value of gross profit in Year 1 of your new plan is $___

B. The value of Total marketing mix expenses in year 3 is ___

C. The value of Average Net Income of 3 years is $___

D. The required annual growth rate in sales to generate a $1.5 million average net income is ___ %

(Hint: use Goal Seek)