As a marketing manager for one of the worlds largest automakers, you are responsible for the advertising

As a marketing manager for one of the world’s largest automakers, you are responsible for the advertising campaign for a new energy- efficient sports utility vehicle. Your support team has prepared the following table, which summarizes the (year-end) profitability, estimated number of vehicles sold, and average estimated selling price for alternative levels of advertising. The accounting department projects that the best alternative use for the funds used in the advertising campaign is an investment returning 9 percent. In light of the staggering cost of advertising (which accounts for the lower projected profits in years 1 and 2 for the high and moderate advertising intensities), the team leader recommends a low advertising intensity in order to maximize the value of the firm. Do you agree?Explain.

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Profits (in milliona) Year Year 2 Year3 Year Year 2 Yoar 3 Year 1 Year 2 Year 3 Unis Sold (in Avarage Salling Price Advertising Intensity High $20 80 $300 80 110 120 25 $35,000 $36,500 $38,000 35,800 36,100 36,300 35,900 36,250 36,000 10 60 12.5 40 75 135 118 Low 7.2