4.3 Noting the success of Energizer’s long-running advertising campaign featuring a robotic rabbit and AFLAC’s campaign showcasing a duck, you decide to combine the two ideas and run a two-year advertising campaign for your company featuring a robotic duck. You forecast that at the end of the first year, you will incur an advertising cost of $150,000 but make no profit. At the end of the second year, you will incur another cost of $100,000, and your advertising will lead to an additional after-tax operating profit of $120,000. At the end of the third year, you will have no further costs, but the lingering effects of your advertising will lead to another after-tax profit of

$120,000. There are no further costs or profits, and you are financing the campaign with internally generated funds. If your discount rate is 9 percent, should you undertake the advertising campaign? Why or why not?