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Using the data in the decision tree, calculate the net gain for the marketing campaign - Edexcel - A-Level Business - Question 1 - 2022 - Paper 2
Question 1
Using the data in the decision tree, calculate the net gain for the marketing campaign. State your answer to two decimal places. You are advised to show your working... show full transcript
Worked Solution & Example Answer:Using the data in the decision tree, calculate the net gain for the marketing campaign - Edexcel - A-Level Business - Question 1 - 2022 - Paper 2
Step 1
Calculate Initial Costs
Answer
The initial cost of the marketing campaign is calculated as follows:
- Total cost: £3 million
- Portion allocated to the marketing campaign: 60%
Thus,
egin{align*} ext{Initial cost} & = 0.6 imes £3,000,000 \ & = £1,800,000. ext{Remaining costs for other expenses} & = 400,000 imes 50 = £20,000. ext{Total initial costs} & = £1,800,000 + £20,000 = £1,820,000. \end{align*}
Step 2
Step 3
Calculate Net Gain
Answer
The net gain can be calculated by subtracting the initial costs from the expected value:
egin{align*} ext{Net gain} & = ext{Expected value} - ext{Initial costs} \ & = £1,800,000 - £20,000 \ & = £1,780,000. \end{align*}
Expressing this in millions, the net gain is £1.78 million.