Question: having trouble with this assignment - has to be done in excel. Please help Suppose you are trying to decide how much to spend in

having trouble with this assignment - has to be done in excel. Please help

having trouble with this assignment - has to be done in excel.

Suppose you are trying to decide how much to spend in advertising in order maximize total profits. As you know, the first dollar spent on advertising gives you the most bang for the buck. The marginal value of extra dollar spent on advertising has diminishing returns, i.e. Sales increase at a diminishing rate, so beyond a certain point, you might be spending more in advertising than the gain in Sales. Suppose the Sales are a function of Advertising Expense as follows: Sales = 10,000 +300*sqrt(AdExp) Suppose the Cost of Sales (not including Advertising Expense) = 6,000 + 0.5*Sales So the profit = Sales (Cost Of Sales Without AdExp) AdExp 1. What should be the AdExp so that the profits are maximized? Solve this problem with no constraints. What is the optimum Sales, what is the optimum profit? Solve by using the (i) Tabular Approach, (ii) the graphical approach, (iii) the Calculus Approach (you can get my help) and (iii) GRG Approach (Using Solver). 2. If the Advertising budget is $8,000, what is the optimum advertising expense, sales and profit? Solve using Tabular, Graphical and GRG approaches. Is there a slack? How much? 3. If the Advertising budget is $3,000, what is the optimum advertising expense, sales and profit? Solve using Tabular approach and Solver. Is there a slack? How much? Note: Since Sales increase at a diminishing rate with advertising, this problem could not have been solved using I inpar Propramminrt

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