Sales of Mini Mochi MunchComplete the table below: (Round to the nearest dollar.)Incremental Earnings ForecastKokomochi 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 printadvertising 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 companyexpects 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 $2.2million 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 SalesCost of Goods SoldGross ProfitSelling, General, and Admin. ExpensesDepreciationEBITIncome tax at 21%Unlevered Net IncomeGASA69GAYear 1Year 20

The objective of the question is to calculate the incremental earnings associated with the…

Answered: Sales of Mini Mochi Munch Complete the…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter4A: Nopat Breakeven: Revenues Needed To Cover Total Operating Costs

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