Neco 2023 Commerce Question 42

Practice objective / multiple choice question 42 from the 2023 Neco Commerce examination.

Neco 2023 Commerce Objective / Multiple Choice Hard Difficulty
Question 42 NECO • 2023 • COMMERCE • objective

A company has an advertising budget of ₦2,000,000. It can spend the budget on TV and newspaper ads. TV ads have a cost per thousand impressions (CPM) of ₦5,000 and a conversion rate of \(0.8\%\) from impression to sale; each sale yields a profit of ₦12,000. Newspaper ads have a CPM of ₦2,000 and a conversion rate of \(0.5\%\), with the same profit per sale. If the total TV impressions exceed 300,000, the CPM for the excess TV impressions is reduced by \(10\%\). Determine how much of the budget should be allocated to TV and to newspaper to maximise total profit, and state the maximum profit.

Answer Options

A. TV: ₦2,000,000, Newspaper: ₦0; Maximum profit = ₦50,000,000
B. TV: ₦1,000,000, Newspaper: ₦1,000,000; Maximum profit = ₦58,000,000
C. TV: ₦500,000, Newspaper: ₦1,500,000; Maximum profit = ₦55,000,000
Correct Answer D. TV: ₦0, Newspaper: ₦2,000,000; Maximum profit = ₦60,000,000
Correct Answer
D
Correct Option:
TV: ₦0, Newspaper: ₦2,000,000; Maximum profit = ₦60,000,000

About This Question

This is Neco 2023 Commerce Question 42. It is one of the objective questions from the 2023 Neco Commerce examination.

Difficulty level: Hard .

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