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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 $ 4 .

Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $4.29 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 $10.07 million this year and $8.07 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 $2.07 million each year.
Kokomochi's gross profit margin for the Mini Mochi Munch is 34%, and its gross profit margin averages 25% for all other products. The company's marginal corporate tax rate is 33% 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
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