If a business spends $500 on advertising and gains 50 new customers, what is the

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Question: If a business spends $500 on advertising and gains 50 new customers, what is the cost per acquisition (CPA)?

Options:

Correct Answer: $10

Solution:

CPA = Total Advertising Cost / Number of New Customers = $500 / 50 = $10.

If a business spends $500 on advertising and gains 50 new customers, what is the cost per acquisition (CPA)?

If a business spends $500 on advertising and gains 50 new customers, what is the cost per acquisition (CPA)?

Step 1: Identify the total amount spent on advertising. In this case, it is $500.
Step 2: Identify the number of new customers gained from the advertising. Here, it is 50 new customers.
Step 3: Use the formula for Cost Per Acquisition (CPA), which is CPA = Total Advertising Cost / Number of New Customers.
Step 4: Plug in the numbers into the formula: CPA = $500 / 50.
Step 5: Calculate the result: $500 divided by 50 equals $10.
Step 6: Conclude that the cost per acquisition (CPA) is $10.

Cost Per Acquisition (CPA) – CPA is a metric used to determine the cost associated with acquiring a new customer through advertising.