Evaluating a New Marketing Campaign's ROI

{"problem":"A company plans to invest $50,000 in a new marketing campaign. The expected increase in sales is $120,000. The cost of goods sold for these sales is 60%. What is the ROI of the campaign?","pitfall":"Novices often focus on gross revenue instead of net profit, which ignores the costs involved in generating that revenue, leading to an overestimation of ROI.","steps":[{"label":"Step 1: Calculate Cost of Goods Sold (COGS)","calculation":"COGS = Expected Sales × Cost Percentage\nCOGS = $120,000 × 60% = $72,000","annotation":"This step determines the actual costs incurred from the expected sales, which is critical for calculating net profit. By understanding COGS, we can…

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