Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $4.87 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 $11.59 million this year and $9.59 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 $3.77 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 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.

Calculate the incremental earnings for year 1 below:

(Round to three decimal places.) Year 1 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 $

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 $

Income Tax at 40% $

Incremental Earnings $