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Kokomochi in considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch Kokomochi plans to spend S4 77 million

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Kokomochi in considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch Kokomochi plans to spend S4 77 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 59 84 million this year and 57 84 million next year. In addition, the company expects that new consumers who try the Mini Mochi Munich will be more likely to try Kokorochi's other products. As a result, sales of other products are expected to rise by $2.64 million each year Kokomochi's gross profit margin for the Mini Mochi Munch is 36% and its gross profit margin averages 25% for all other products. The company's marginal corporate tax rate is 40% both this year and next year What are the incremental earings associated with the advertising campaign? Note: Assume that the company has adequate positive income to take advantage of the tax benefits provided by any net losses associated with this campaign Calculate the incremental earnings for year 1 below (Round to three decimal places) Year 1 $ $ $ Incremental Earning Forecast (5 million) Sales of Mini Mochi Munch Other Sales Cost of Goods Sold Gross Profit Selling General, and Administrative Depreciation EBIT Income Tax at 40% $ $ $ $ $ Incremental Earning $ Calculate the incremental earnings for year 2 below: (Round to three decimal places.) Year 2 Incremental Earnings Forecast ($ million) Sales of Mini Mochi Munch $ Other Sales Cost of Goods Sold Gross Profit $ $ $ Selling, General, and Administrative Depreciation EBIT GA Income Tax at 40% $ Incremental Earnings BA

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