Question: can someone help me with this problem please? i do not understand how to complete it? Kokomochi is considering the launch of an advertising campaign
can someone help me with this problem please? i do not understand how to complete it?
Kokomochi is considering the launch of an advertising campaign for its latest dessertproduct, the Mini Mochi Munch. Kokomochi plans to spend $5.0million onTV, radio, and print advertising this year for the campaign. The ads are expected to boost sales of the Mini Mochi Munch by $9.0million this year and $7.0
million next year. Inaddition, the company expects that new consumers who try the Mini Mochi Munch will be more likely to tryKokomochi's other products. As aresult, sales of other products are expected to rise by $2.0 million each year.Kokomochi's gross profit margin for the Mini Mochi Munch is 35%, and its gross profit margin averages 25% for all other products. Thecompany's marginal corporate tax rate is 21%
both this year and next year. What are the incremental earnings associated with the advertising campaign?
Complete the tablebelow:(Round to the nearestdollar.)
| Incremental Earnings Forecast | Year 1 | Year 2 | ||
| Sales of Mini Mochi Munch | $ | $ | ||
| Other Sales | ||||
| Cost of Goods Sold | ||||
| Gross Profit | $ | $ | ||
| Selling, General, and Admin. Expenses | ||||
| Depreciation | 0 | 0 | ||
| EBIT | $ | $ | ||
| Income tax at 21% | ||||
| Unlevered Net Income | $ | $ |
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