Question
In: Finance
KC Marketing (KC) makes the following specialized campaigns for its customers: KC will prepare a TV...
KC Marketing (KC) makes the following specialized campaigns for its customers:
KC will prepare a TV commercial for $1.5M, an app for $500K, and a Facebook page for $500K. The TV commercial, the app, and the Facebook page are not interrelated. If a customer purchases all items, the total cost is $1.5M, which the customer will pay upon signing the contract. Furthermore, only and only if the app is downloaded more than 10,000 times in the first month, KC will receive a one-time bonus of $100K. The agreement creates enforceable rights and obligations. Before the end of the fiscal quarter, the app was actually downloaded more than 10,000 times in the first month. How much revenue will KC allocate to the TV commercial?
| a. |
$1.5M |
|
| b. |
$900K |
|
| c. |
$300K |
|
| d. |
$1M |
|
| e. |
$600K |
Solutions
Expert Solution
Answer :
Assuming customer purchase all the items, so the total price = $1.5M
So, revenue to TV Commercial will be = $1.5M * 1.5/(1.5+0.50+0.50)
= $900K
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