Creative Solutions is thinking of introducing a new brand under the name of Peak Goal. Peak
Goal will compete in the same market as Top Goal. The budget to launch this brand is
expected to be $20 million. If it is launched Peak Goal will capture 10% of the market. It has a contribution margin of
40%. Half of the sales of Peak Goal will be cannibalized from the sales of Top Goal.
An alternative strategy for Creative Solutions is to cancel the introduction of Peak Goal and
instead to spend the $20 million to promote Top Goal. This action is expected to double the
sales for Top Goal. Both brands (Top Goal and Peak Goal) would sell at the same price. Where should the company spend the $20 million and why?