Answer to Question #236705 in Economics for Zee

Question

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Zen Communication is a large-scale marketing materials firm in Cape Town.

They’d like to achieve a return on investment of 30%. The marketing

department estimates the firm can achieve the following sales:

PROBABILITY SALES

50% R45 633 384

50% R55 554 500

The marketing department limits marketing expenses to 5% of sales. The credit

department aims to limit bad debt to 2% of sales. The cost of goods sold is

40% of sales.

HR has been provided with the guideline of limiting salaries and HR expenses to

27% of sales. Courier and delivery expenses are expected to not exceed

1,5% of sales. Other operating expenses are estimated as follows:

Expenses 5795937

The firm estimates that it will have to pay R20 000 in interest. The tax rate is

28% of earnings before tax.

i) Prepare the projected statement of comprehensive income and

determine the expected earnings

Answer 1

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