AdCreate negotiated a rate of 12.5% for a commission system payment with Worry F

Question

AdCreate negotiated a rate of 12.5% for a commission system payment with Worry Free Financial for a campaign in 2016 AdCreate arranged for the airing of three ads, during Newshour on CNN, in the first week of the launch campaign. AdCreate's income for these three ads in the first week was $49,375. Based on this information, which of the following is true? I. The client (Worry Free Financial) paid AdCreate $425,625 for the three ads. II. AdCreate paid CNN $425,625 for the three ads. II.AdCreate paid CNN $345,625 for the three ads. Multiple Choice Ill only I and l l only only

Explanation / Answer

(1) III only.

The answer is Adcreate paid CNN $ 345,625 for the three adds.

It is because for the airing of three ads Adcreate paid the TV channel CNN. Now, the calculation is,

It is said that in the first week, the income of Adcreate was $49,375. So, Adcreate paid = $ 49375 × 7 = $ 345,625 to CNN.

From the calculation, option 1 seems to be correct.

Hope this helps :)

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