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a brew is launching a new product; brewed ginger ale with a low alcohol content. the brewer plans to spend $4 million promoting this product
a brew is launching a new product; brewed ginger ale with a low alcohol content. the brewer plans to spend $4 million promoting this product this year, which is expected to expand its sales of this product to $11 million this year and $8 million next year. they do expect there will br a loss of sales of $3 million this uear and next year in their other products as customers switch to drinking the new ginger ale. the gross profit margin for the new ginger ale is 40%, the gross profit margin of all the brewers other products is 30%, and the brewers marginal tax rate is 35%. what are incremental earnings asising from the promotional campign this year?
O A. $1.40 million O B. $4.40 million O C. $1.56 million O D. $0.84 million O A. $1.40 million O B. $4.40 million O C. $1.56 million O D. $0.84 million Step by Step Solution
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