Fill in the blank in the text about the sales of Mini Mochi Munch, business and finance homework help
Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $5.25 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 $8.42 million this year and by $6.42 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 $3.92 million each year. Kokomochi’s gross profit margin for the Mini Mochi Munch is 33%, and its gross profit margin averages 25% for all other products. The company’s marginal corporate tax rate is 38% both this year and next year. What are the incremental earnings associated with the advertising campaign? for years 1 and 2
- Year 1
Sales of Mini Mochi Munch _________
Other Sales _________
Cost of Goods Sold _________
Gross Profit _________
Selling, General & Admin. _________
Depreciation _________
EBIT _________
Income tax at 38% _________
Unlevered Net Income _________
Year 2
Sales of Mini Mochi Munch _________
Other Sales _________
Cost of Goods Sold _________
Gross Profit _________
Selling, General & Admin. _________
Depreciation _________
EBIT _________
Income tax at 38% _________
Unlevered Net Income _________
