A brewer is launching a new product: brewed ginger ale with a low alcohol content. The brewer plans to spend $5 million

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A Brewer Is Launching A New Product Brewed Ginger Ale With A Low Alcohol Content The Brewer Plans To Spend 5 Million 1 (43.25 KiB) Viewed 34 times

A brewer is launching a new product: brewed ginger ale with a low alcohol content. The brewer plans to spend $5 million promoting this product this year, which is expected to expand the sales of this product to $12 million this year and $8 million next year. They do expect there will be loss of sales of $3 million this year and next year in their other products as customers switch to drinking the new ginger ale. The gross profit margin for the new ginger ale is 40%, the gross profit margin of all of the brewer's other products is 30%, and the brewer's marginal corporate tax rate is 20%. What are incremental earnings arising from the promotional campaign this year? A) $4.80 million B) $1.73 million OC) $1.52 million D) $1.92 million