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Category > Accounting Posted 29 Apr 2017 My Price 3.00

Kokomochi is considering the launch of an advertising

 

  1. Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $5 million on TV, radio, and print adver- tising this year for the campaign. The ads are expected to boost sales of the Mini Mochi Munch by $9 million this year and by $7 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 prod- ucts. As a result, sales of other products are expected to rise by $2 million each year.

Kokomochi’s gross profit margin for the Mini Mochi Munch is 35%, and its gross profit mar- gin averages 25% for all other products. The company’s marginal corporate tax rate is 35% both this year and next year. What are the incremental earnings associated with the advertising campaign?

 

 

 
 

Answers

Alpha Geek
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Status NEW Posted 29 Apr 2017 05:04 AM My Price 3.00

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file 1493445673-Answer.docx preview (221 words )
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