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A brewer is launching a new product: brewed ginger ale with a low alcohol content. The brewer plans to spend $4 million promoting this product
A brewer 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 the sales of this product to $11 million this year and $8 million next year. The gross profit margin for the new ginger ale is 40%, , and the brewer's marginal corporate tax rate is 35%. What are incremental earnings arising from the promotional campaign this year and next year?
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