Advertising-to-Sales Ratio Assignment
February 19th, 2020
GEICO, the number-two auto insurer with $15 billion in revenue last year, spent $1.4 billion on advertising that year and plans to continue spending the same percentage of sales on advertising next year. The average advertising-to-sales ratio for the insurance industry is 0.3 percent of sales. If GEICO projects $18 billion in sales next year, using the percentage-of-sales method of advertising budgeting, how much will the company budget for advertising if basing it on projected sales?
The advertising-to-sales ratio for the last year is (Round to four decimal places.)
Using the advertising-to-sales ratio for the last year, GEICO will budget $ billion for advertising next year. (Round to one decimal place.) Get Finance homework help today