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A Report about Whether Extra Advertising Should be Increased or Not

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A Report about Whether Extra Advertising Should be Increased or Not Introduction To help decide whether extra advertising should be done in April and May, two cash flow forecasts have been produced. One shows the position of Trafford Ltd if extra advertising is done, and one shows the position if it isn't done. Also, two profit and loss accounts have been made. One shows the position of the company if no changes are made, and the other shows the position of the company if extra advertising is done. The advantages of doing extra advertising There are many advantages of doing extra advertising in April and May. ...read more.


They are: :( According to the cash flow forecasts, the company will have �500 less in the bank if extra advertising is done. :( The more advertising that is done, the more the cash outflows, as the advertising cost �1000 for every month it is done in. :( The cost of the materials will also increase, which will make the cash outflows increase further. :( The advertising may not be successful in promoting the product, and may therefore result in having less of an increase in sales. Recommendation I think that the amount of advertising done should be increased in May and April. This is because I think it will benefit the company over the long run. ...read more.


This means that the money made on the 9000 Giggsy's sold in June has not yet been counted on the cash flow forecast. If the money made for the June sales was added on, than the company would have more cash than shown on the profit and loss account. I feel that it is in the best interests of the company to do extra advertising. After people have been made aware of the product, it will no longer be necessary for the extra advertising to continue. This means that if the company do lose any money, once advertising is stopped, the money lost will be replaced. This document was downloaded from Coursework.Info - The UK's Coursework Database ?? ?? ?? ?? 9 A S M A A N A D A T 1 1 I ...read more.

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