1. Kokomochi is considering the launch of an advertising campaign for its latest dessert product the Mini Mochi Munch. Kokomochi plans to spend $3.96 million on TV, radio, and print advertising this year for the campaign. The ads are expected to boost sales of the Mini Mochi Munch by $10.02 million this year and $8.02 million next year. In addition, the company expects that new consumers who try the Mini Mochi Munch will be more likely to try Kokomochi's other products. As a result, sales of other products are expected to rise by $3.24 million each year. Kokomochi's gross profit margin for the Mini Mochi Munch is 33%, and its gross profit margin averages 25% for all other products. The company's marginal corporate tax rate is 40% both this year and next year. What are the incremental earnings associated with the advertising campaign? Note: Assume that the company has adequate positive income to take advantage of the tax benefits provided by any net losses associated with this campaign. Calculate the incremental eamings for year 1 below. (Round to three decimal places.) Year 1 $ $ Incremental Earnings Forecast ($ million) Sales of Mini Mochi Munch Other Sales Cost of Goods Sold Gross Profit Selling, General, and Administrative Depreciation EBIT $ $ Income Tax at 40% $ $ Incremental Earnings Calculate the incremental eamings for year 2 below. (Round to three decimal places.) Year 2 $ $ Incremental Earnings Forecast ($ million) Sales of Mini Mochi Munch Other Sales Cost of Goods Sold Gross Profit Selling, General, and Administrative Depreciation EBIT $ $ $ Income Tax at 40% Incremental Earnings