You are the manager in charge of global operations at BankGlobal – a large commercial bank that operates in a number of countries around the world. You must decide whether or not to launch a new...


You are the manager in charge of global operations at BankGlobal – a large commercial bank that operates in a<br>number of countries around the world. You must decide whether or not to launch a new advertising campaign in the<br>U.S. market. Your accounting department has provided the accompanying statement, which summarizes the<br>financial impact of the advertising campaign on U.S. operations. In addition, you recently received a call from a<br>colleague in charge of foreign operations, and she indicated that her unit would lose $8 million if the U.S.<br>advertising campaign were launched. Your goal is to maximize BankGlobal's value.<br>Post-Advertising Campaign<br>$31,980, 200<br>Pre-Advertising Campaign<br>Total Revenues<br>$18,610,900<br>Variable Cost<br>TV Airtime<br>5,750,350<br>1,960,580<br>7,710,930<br>8,610,400<br>Ad development labor<br>Total variable costs<br>3,102,450<br>11,712,850<br>Direct Fixed Cost<br>Depreciation - computer<br>equipment<br>1,500,000<br>1,500,000<br>Total direct fixed cost<br>1,500,000<br>1,500,000<br>Indirect Fixed Cost<br>Managerial salaries<br>Office supplies<br>8,458,100<br>8,458,100<br>2,003,500<br>2,003,500<br>Total indirect fixed cost<br>$10,461,600<br>$10,461,600<br>Should you launch the new campaign? Explain.<br>

Extracted text: You are the manager in charge of global operations at BankGlobal – a large commercial bank that operates in a number of countries around the world. You must decide whether or not to launch a new advertising campaign in the U.S. market. Your accounting department has provided the accompanying statement, which summarizes the financial impact of the advertising campaign on U.S. operations. In addition, you recently received a call from a colleague in charge of foreign operations, and she indicated that her unit would lose $8 million if the U.S. advertising campaign were launched. Your goal is to maximize BankGlobal's value. Post-Advertising Campaign $31,980, 200 Pre-Advertising Campaign Total Revenues $18,610,900 Variable Cost TV Airtime 5,750,350 1,960,580 7,710,930 8,610,400 Ad development labor Total variable costs 3,102,450 11,712,850 Direct Fixed Cost Depreciation - computer equipment 1,500,000 1,500,000 Total direct fixed cost 1,500,000 1,500,000 Indirect Fixed Cost Managerial salaries Office supplies 8,458,100 8,458,100 2,003,500 2,003,500 Total indirect fixed cost $10,461,600 $10,461,600 Should you launch the new campaign? Explain.

Jun 09, 2022
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