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is considering the launch of an advertising campaign for its latest dessert​ product, the Mini Mochi Munch. Kokomochi plans to spend ​$4.6 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 ​$9.4 million this year and ​$7.4 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 ​$2.3 million each year. What are the incremental earnings associated with the advertising campaign?

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Answer to a math question is considering the launch of an advertising campaign for its latest dessert​ product, the Mini Mochi Munch. Kokomochi plans to spend ​$4.6 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 ​$9.4 million this year and ​$7.4 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 ​$2.3 million each year. What are the incremental earnings associated with the advertising campaign?

Expert avatar
Velda
4.5
110 Answers
**Year 1:**
Incremental sales from Mini Mochi Munch: $9.4 million
Incremental sales from other products: $2.3 million
Advertising campaign costs: $4.6 million

Incremental earnings Year 1 = (9.4 + 2.3) - 4.6 = 11.7 - 4.6 = $7.1 million

**Year 2:**
Incremental sales from Mini Mochi Munch: $7.4 million
Incremental sales from other products: $2.3 million

Incremental earnings Year 2 = 7.4 + 2.3 = 9.7 million

**Total incremental earnings for the two years:**
7.1 million (Year 1) + 9.7 million (Year 2) = $16.8 million

**Answer: The total incremental earnings over the two-year period are $16.8 million.**

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