Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $4.7 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 $9.5 million this year and $7.5 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 $2.4 million each year. Kokomochi's gross profit margin for the Mini Mochi Munch is 37%, and its gross profit margin averages 21% 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?

Incremental Earnings Forecast

Year 1

Sales of Mini Mochi Munch

$

Other Sales

$

Cost of Goods Sold

$

Gross Profit

$

Selling, General, and Admin. Expenses

$

Depreciation

0

EBIT

$

Income tax at 35%

$

Unlevered Net Income

$

Year 2

Sales of Mini Mochi Munch

$

Other Sales

$

Cost of Goods Sold

$

Gross Profit

$

Selling, General, and Admin. Expenses

$

Depreciation

0

EBIT

$

Income tax at 35%

$

Unlevered Net Income

$