To determine the advertisement expenditure required to achieve a sales target of Rs. 120 lakh, we need to use the given information on mean, standard deviation, and correlation coefficient.

**Step 1: Understanding the Given Data**
- Advertisement Expenditure (Adv Exp): Mean = Rs. 20 lakh, Standard Deviation (S.D.) = Rs. 3 lakh
- Sales Revenue (Sales): Mean = Rs. 100 lakh, Standard Deviation (S.D.) = Rs. 12 lakh
- Correlation Coefficient (r) = 0.8

**Step 2: Calculate the Regression Equation**
The regression equation can be used to estimate the expected sales revenue based on the advertisement expenditure. The equation is:
Sales = a + b * Adv Exp
where 'a' is the intercept and 'b' is the slope of the regression line.

To calculate the slope 'b', we use the formula:
b = r * (S.D. of Sales) / (S.D. of Adv Exp)
b = 0.8 * (12 lakh) / (3 lakh) = 3.2

To calculate the intercept 'a', we use the formula:
a = Mean of Sales - (b * Mean of Adv Exp)
a = 100 lakh - (3.2 * 20 lakh) = 100 lakh - 64 lakh = 36 lakh

Therefore, the regression equation is:
Sales = 36 + 3.2 * Adv Exp

**Step 3: Estimate the Advertisement Expenditure**
Now, we need to find the advertisement expenditure required to achieve a sales target of Rs. 120 lakh. Let's substitute the values in the regression equation:
120 = 36 + 3.2 * Adv Exp

Rearranging the equation:
3.2 * Adv Exp = 120 - 36
3.2 * Adv Exp = 84

Dividing both sides by 3.2:
Adv Exp = 84 / 3.2
Adv Exp ≈ 26.25 lakh

Therefore, the company should spend approximately Rs. 26.25 lakh on advertisement to attain a sales target of Rs. 120 lakh.

**Explanation:**
The correlation coefficient (r = 0.8) indicates a strong positive linear relationship between advertisement expenditure and sales revenue. By using the regression equation, we can estimate the sales revenue based on the advertisement expenditure. In this case, we estimated the advertisement expenditure required to achieve a sales target of Rs. 120 lakh.

It's important to note that this estimation is based on the assumption that the relationship between advertisement expenditure and sales revenue remains consistent. Other factors such as market conditions, competition, and consumer behavior may also influence sales revenue. Therefore, it is advisable for the company to consider these factors along with the estimated advertisement expenditure to develop an effective marketing strategy to reach the desired sales target.