• Coca-Cola is considering a new advertising campaign to boost sales with the following financial details:
  • Campaign Costs: $300 million
  • Estimated Increase in Annual Sales: $1 billion
  • Variable Costs: $500 million annually
  • Fixed Costs: $100 million annually
  • Tax Rate: 25%

• Requirements:
  1. Calculate the net increase in annual net income from the campaign.
  2. Prepare an income statement for the first year.
  3. Analyze the return on investment (ROI) for the campaign.
  4. Discuss the strategic benefits of the advertising campaign.
  5. Evaluate the risks and potential market response.