Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $4.8 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 $7.6 million this year and $5.6 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 $2.4 million each year. Kokomochi's gross profit margin for the Mini Mochi Munch is 34%, and its gross profit margin averages 22% 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? Complete the following table:
Incremental Earnings Forecast Year 1
Sales of Mini Moch Munch $7,600,000
Other Sales $2,400,000
Cost of goods sold $5,016,000
Gross Profit $2,584,000
Selling, General, and Admin expenses $4,800,000
Depreciation $
EBIT $
Income tax at 35% $
Unlevered Net Income $

ed

explanation:

dew

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

the answer is b hope you pass