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VECCMs (vitamin enhanced chocolate coated marshmallows) failed to gain distribution in most health food stores, but Paul was determined to pursue his dream of marketing
VECCMs (vitamin enhanced chocolate coated marshmallows) failed to gain distribution in most health food stores, but Paul was determined to pursue his dream of marketing a good-tasting snack food that would include minimum daily requirements of most vitamins and minerals. He sold them in 16oz resealable bags through independent grocery stores throughout the Mid-Atlantic area of the U.S. Paul's Selling prices to wholesalers of $0.99 a bag resulted in a contribution margin before advertising and promotion 32%. Wholesalers sold to retailers and retailers to consumers, earning margins of 24% and 50% respectively. Sales are currently 1,100 bags per week. Paul is considering distributing 1 million free standing insert (FSI) coupons for $0.20 off the regular price and expects to pay $6 per thousand for artwork and distribution. Each coupon redeemed will cost an additional $0.02 in processing fees. Based on information from question 2, if all of the redemptions are incremental sales, what is the incremental profit/loss of the coupon campaign
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