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Lenovo Incorporated is considering launching an advertising campaign for a consumer technology product. The campaign will run on TV , radio, and in print. Without
Lenovo Incorporated is considering launching an advertising campaign for a consumer technology product. The campaign will run on TV radio, and in print. Without the ad campaign, sales of the product are expected to be $ one year from now, and with the ad campaign sales of the product are expected to be $ one year from now. In addition, the company expects that new consumers who try the product based on the ads will be more likely to try Lenovo's other products, resulting in an increase in sales of Lenovo's other products of $ each year. Lenovo's expects the additional sales to have equal effects on its current assets and current liabilities, which means there will be no change in its net working capital as a result of the ad campaign. Lenovo's gross profit margin EBIT as a of sales across all products in its product line is The companys marginal corporate tax rate is What are the incremental earnings associated with the advertising campaign one year from now?
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