Business, 05.11.2019 03:31, iliketurtures
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 $ 8.6 million this year and $ 6.6 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 $ 2.3 million each year. kokomochi's gross profit margin for the mini mochi munch is 32 %, and its gross profit margin averages 25 % for all other products. the company's marginal corporate tax rate is 35 % both this year and next year. what are the incremental earnings associated with the advertising campaign?
Answers: 3
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