Question

Requirement 4. Zeke​'s top management is deciding whether to embark on a $ 190 comma 000 advertising campaign. The marketing firm has projected annual sales volume to increase by 18​% as a result of this campaign. Assuming that the projections are​ correct, what effect would this advertising campaign have on the​ company's annual operating​ income?

Answer 1

Answer: It will increase the company's annual operating income by 18%.

Explanation: Operating income is an accounting and finance term which is known as the total amount generated by a business Organisation after the total costs that are associated with the operations and the tax have been deducted from the total revenue generated during the period under review.

AN OPERATING INCOME CAN BE CALCULATED YEARLY OR ANNUALLY (ANNUAL OPERATING INCOME).

The higher the operating income the higher the profit margin earned by the business Organisation.