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Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $ 5 .

Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $5.96 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 $8.62 million this year and $6.62 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 $2.41 million each year. Kokomochi's gross profit margin for the Mini Mochi Munch is 36%, and its gross profit margin averages 24% for all other products. The company's marginal corporate tax rate is 40% both this year and next year. What are the incremental earnings associated with the advertising campaign?
Note: Assume that the company has adequate positive income to take advantage of the tax benefits provi
Calculate the incremental earning for year 1 and 2(round to three decimal places.)
Incremental Earnings Forecast ($ 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 Earnings $__________
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