As marketing manager for a newly created software company, Katrina is deciding whether to hire a company sales force. To make this decision, Katrina needs to consider whetherA. her firm should attend trade shows. B. her firm has a hot product. C. having a sales force is worth more than it costs. D. she will be able to find an effective supply chain manager. E. online advertising will work.

Question

Elizabeth Wood

Business

12 June, 12:32

As marketing manager for a newly created software company, Katrina is deciding whether to hire a company sales force. To make this decision, Katrina needs to consider whetherA. her firm should attend trade shows. B. her firm has a hot product. C. having a sales force is worth more than it costs. D. she will be able to find an effective supply chain manager. E. online advertising will work.

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Answers (1)

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Lorelei Adkins · Answer 1

C) having a sales force is worth more than it costs.

Explanation:

Whenever an individual or a business wants to start a new project, hire more workers, or expand their facilities, they first must make a cost benefit analysis.

You have to estimate what are the benefits that the new project or new employees will generate, and then you must calculate the costs of carrying on the new project or hiring the new employees. If the benefits exceed the costs, then the project should be carried on or the employees should be hired. If the costs exceed the benefits, then the project should be cancelled and no new employees should be hired.

When projects are being evaluated, this type of analysis is done through the calculation of the NPV (NPV ≥ 0). When it comes to hiring new employees, the MRP (marginal revenue product) should always be ≥ than the MRC (marginal resource costs).