A Brewer is Launching a new product.

Spend: $4million

Sales: $11million

Loss: $1million

Gross profit margin on Ginger Ale: 40%

Gross profit margin other product: 30%

Marginal corporate tax rate: 35%

What are incremental earnings from the promotional campaign this year?

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 \$8million next year. They do expect there will be loss of sales of $1 million this year 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 of the brewer's other products is 30%, and the brewer's marginal corporate tax rate is 35%. What are incremental earnings arising from the promotional campaign this year