Capital Budgeting
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Here is the situation. I am an account manager, I have been given an account. The account is on track to generate 1M dollars a year. I want to take 4% of the quarterly revenue and dedicate it to a marketing program that will help the account generate 1.5M at the end of the fiscal year, 1.75M at year 2 and 2M dollars at year 3. The problem is I do not know the cost, other then the 4% per quarter that I will be dedicating to marketing. In this instance can I still do a NPV analysis. The reseller (account) is selling laptops. Can I do NPV with just the cost I will be dedicating to the marketing program?
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Yes, you can still do an NPV analysis. You can do an incremental NPV analysis and determine how much more will the marketing cost enable you to increase the ...
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