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Complete table for year 1 AND year 2 Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi
Complete table for year 1 AND year 2
Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $4.8 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 $10.4 million this year and $8.4 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 $2.1 million each year. Kokomochi's gross profit margin for the Mini Mochi Munch is 32%, and its gross profit margin averages 23% for all other products. The company's marginal corporate tax rate is 35% both this year and next year. What are the incremental earnings associated with the advertising campaign? Complete the table below: (Round to the nearest dollar.) Year 1 Incremental Earnings Forecast Sales of Mini Mochi Munch Other Sales $ A 0 Cost of Goods Sold $ Gross Profit $ $ Selling, General, and Admin. Expenses Depreciation 0 EBIT $ $ Income tax at 35% Unlevered Net Income AStep by Step Solution
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