Advertising campaign for its latest dessert product

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Reference no: EM132071183

Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend$ 5.3million on TV, radio and print advertising this year for the campaign. The ads are expected to boost sales of the Mini Mochi Munch by $ 7.million this year and $ 5.7million 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 $ 1.7million each year.Kokomochi's gross profit margin for the Mini Mochi Munch is 32 %, and its gross profit margin averages 21 %for all other products. The company's marginal corporate tax rate is 30 % both this year and next year. Show the incremental earning forecast for year 1 and year 2.

Reference no: EM132071183

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