Sales of Mini Mochi Munch Complete the table below: (Round to the nearest dollar.) Incremental Earnings Forecast Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $5.8 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 $10.3 million this year and $8.3 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 $2.2 million each year. Kokomochi's gross profit margin for the Mini Mochi Munch is 39%, and its gross profit margin averages 22% for all other products. The company's marginal corporate tax rate is 21% both this year and next year. What are the incremental earnings associated with the advertising campaign? Other Sales Cost of Goods Sold Gross Profit Selling, General, and Admin. Expenses Depreciation EBIT Income tax at 21% Unlevered Net Income GA SA 69 GA Year 1 Year 2 0
Sales of Mini Mochi Munch Complete the table below: (Round to the nearest dollar.) Incremental Earnings Forecast Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $5.8 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 $10.3 million this year and $8.3 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 $2.2 million each year. Kokomochi's gross profit margin for the Mini Mochi Munch is 39%, and its gross profit margin averages 22% for all other products. The company's marginal corporate tax rate is 21% both this year and next year. What are the incremental earnings associated with the advertising campaign? Other Sales Cost of Goods Sold Gross Profit Selling, General, and Admin. Expenses Depreciation EBIT Income tax at 21% Unlevered Net Income GA SA 69 GA Year 1 Year 2 0
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Sales of Mini Mochi Munch
Complete the table below: (Round to the nearest dollar.)
Incremental Earnings Forecast
Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $5.8 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 $10.3 million this year and $8.3 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 $2.2
million each year.
Kokomochi's gross profit margin for the Mini Mochi Munch is 39%, and its gross profit margin averages 22% for all other products. The company's marginal corporate tax rate is 21%
both this year and next year. What are the incremental earnings associated with the advertising campaign?
Other Sales
Cost of Goods Sold
Gross Profit
Selling, General, and Admin. Expenses
Depreciation
EBIT
Income tax at 21%
Unlevered Net Income
GA
SA
69
GA
Year 1
Year 2
0
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