Question
kokomochi is considering the launch of an advertising campaign for its latest dessert product, the mini mochi munch. kokomochi plans to spend $5.9 million on
kokomochi is considering the launch of an advertising campaign for its latest dessert product, the mini mochi munch. kokomochi plans to spend $5.9 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 $8.5 million this year and $6.5 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 $1.8 million each year. kokomochi gross profit margin for the mini mochi munch is 33 % and it's gross profit margin averages 20% for all other products. the company's marginal corporate tax rate is 35% both this year and next year. what are the incremental earning both associated with the advertising campaign? Earnings Forecast. year 1. year2 sales of Mini much other sales cost of goods sold gross profit selling,general,administrative expenses
depreciation. 0. 0
EBIT
income tax at 35%
unlevered net income
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