In the _____ method of budget determination advertising considered an investment,similar to plant and equipment.
A)payout planning
B)objective and task
C)ROI budgeting
D)competitive parity
E)percentage of sales

Question

Quizplus · Accepted Answer

The ROI (Return on Investment) budgeting method of budget determination considers advertising as an investment and allocates resources on the basis of expected returns. This method measures the profitability of investing in advertising and is based on the assumption that the benefits derived from advertising should be weighed against the costs incurred in its development and implementation. Thus, it is a more logical and quantitative approach compared to other methods, like percentage of sales or competitive parity, which only take into account competitors' spending or sales revenue.

In the _____ Method of Budget Determination Advertising Considered an Investment,similar