Fill in the blank in the text about the sales of Mini Mochi Munch, business and finance homework help

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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

  1. Year 1

Sales of Mini Mochi Munch

Other Sales   _________

Cost of Goods Sold _________

Gross Profit  

Selling, General &
Admin. _________



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 _________

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