Answer Happy

The Director of Marketing for Acme Inc. is planning hismarketing budget for 2014. For a particular product, the Directorof Marketing is planning to split his budget between advertisingexpenses and mail-in rebates. (A mail-in rebate means that, once acustomer has bought the product, he mails the receipt to thecompany, and the company will send the customer a check for theamount of the rebate. We will assume that all customers who buy theproduct receive the rebate). The rebate can be offered inincrements of 25 cents. Sales (units sold) are approximated by thefollowing demand equation: (5000*(A^0.1)) + (10*(R^1.2)) i.e.,(5000 times the Advertising Expenses raised to 0.1) plus (10 timesthe Rebate Per Unit raised to 1.2) where: • A is the AdvertisingExpenses • R is the rebate per unit Marketing expenditures are thesum of the advertising expenses and the total rebate costs. Totalrebate costs are given by number of units sold times the rebate.See Acme Inc. demand equation. If the advertising expenses are $1.1million and the rebate is $3.00, the marketing expenditures willbe
A. $2.33 million B. $1.16 million C. $4.32 million D. $3.97million