Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $4.24 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 $8.83 million this year and $6.83 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 $2.53million each year Kokomochi's gross profit margin for the Mini Mochi Munch is 33% , and its gross profit margin averages%24%

fr 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 provided by any net losses associated with this campaign.

campaign. The ads are expected to boost sales of the Mini Moch Munch by $8.83 milion this year and $6.83 million next year. In be more lkely to try Kokamochits other products. As Kokon och's goss proft margin forte Mn Mohi Much are the incremental eamings assooiated with the advertising campaign? Note Assume that the company has adequate positive income to take camosg fox ls li d pro the Mel Modhi Munch. Kokomochi plans to spend S4:24million on TV, nado, and print advertising tis yeor for the a result, sales of other products are expected to rise by $2.63 milion each year adsition, the company expects that new oonsumers who try the Mini Mochi Munch wl the products The company's ma nat corporate tax rate is 40% both this year and netyea what is 33%, and tsgross proft margin averages 24% for a advantage of the tax benelis provided by any net losses associated with this campaign Caloulale the incremental eamings for yoar 1 below (Round to tree decimal places.) Year 1 Incremental Earnings Forecast (3 milion) Sales of Mini Mochi Munch Other Sales Cost of Goods Soid Gross Pro Belling,General, and Admiristrative EBIT home Tax at 40% ncremental Eamings Caioulate the inoremertal earmings for year 2 below (Round eree decimal places)