GMC Financial Management & Budgeting 2 — Questions and Answers
Question 1: A growth marketer has a $50,000 quarterly budget and wants to allocate it across channels. Which budgeting approach adjusts spend based on real-time performance data?
- Zero-based budgeting
- Dynamic budget allocation (Correct answer)
- Fixed budget allocation
- Incremental budgeting
Correct answer: Dynamic budget allocation
Dynamic budget allocation shifts spend toward top-performing channels in real time, maximizing return on available capital.
Question 2: Which metric best indicates whether a paid acquisition channel is financially sustainable long-term?
- Click-through rate (CTR)
- Cost per click (CPC)
- LTV:CAC ratio (Correct answer)
- Impressions per dollar
Correct answer: LTV:CAC ratio
The LTV:CAC ratio compares customer lifetime value to acquisition cost, revealing whether a channel generates sustainable profit.
Question 3: A SaaS company spends $120,000 on marketing in Q1 and acquires 400 new customers. What is the CAC?
- $200
- $300 (Correct answer)
- $400
- $480
Correct answer: $300
$120,000 ÷ 400 customers = $300 CAC.
Question 4: When a marketing team uses 'contribution margin' to evaluate campaigns, what are they measuring?
- Total revenue minus all fixed costs
- Revenue minus variable costs directly tied to the campaign (Correct answer)
- Gross revenue before any deductions
- Net profit after taxes and overhead
Correct answer: Revenue minus variable costs directly tied to the campaign
Contribution margin = revenue minus variable costs, showing how much a campaign contributes toward covering fixed costs and profit.
Question 5: A growth team is deciding between two campaigns: Campaign A has a 3-month payback period and Campaign B has a 9-month payback period. Which is generally preferred and why?
- Campaign B, because longer campaigns build more brand equity
- Campaign A, because faster payback frees capital for reinvestment sooner (Correct answer)
- Campaign B, because it signals a higher LTV customer
- Campaign A, because it always has a higher ROI
Correct answer: Campaign A, because faster payback frees capital for reinvestment sooner
A shorter payback period means recovered spend can be redeployed faster, accelerating compounding growth.
Question 6: Which of the following best describes 'blended CAC'?
- CAC calculated only from paid channels
- Total marketing and sales costs divided by all new customers, regardless of channel (Correct answer)
- Average CAC across only organic channels
- CAC adjusted for seasonal fluctuations
Correct answer: Total marketing and sales costs divided by all new customers, regardless of channel
Blended CAC divides total acquisition spend (all channels) by total new customers, providing a portfolio-level efficiency view.
Question 7: A marketer wants to determine how much budget to assign to a new experimental channel. Which principle from portfolio theory applies?
- Allocate 100% to proven channels only
- Assign a small, capped percentage to test new channels while protecting core spend (Correct answer)
- Avoid new channels until they are industry-proven
- Match competitor spend on new channels exactly
Correct answer: Assign a small, capped percentage to test new channels while protecting core spend
Portfolio theory supports allocating a small, risk-bounded portion to experimentation while protecting core channel spend.
GMC Financial Management & Budgeting 2
A growth marketer has a $50,000 quarterly budget and wants to allocate it across channels.
Which budgeting approach adjusts spend based on real-time performance data?