question archive This year, Greenore Engineering Inc plans to invest $7 million in its sales and distribution network
This year, Greenore Engineering Inc plans to invest $7 million in its sales and distribution network
Subject:FinancePrice: Bought3
This year, Greenore Engineering Inc plans to invest $7 million in its sales and distribution network. The investment is expected to boost sales of Greenore's flagship product, the MultiHog, by $12 million this year and by $9 million next year. In addition, the company expects that as a result of the investment, sales of another of Greenore's products, the MiniHog, will rise by $3 million each year. Greenore's gross profit margin for the MultiHog is 25%, and its gross profit margin is 20% for the MiniHog. The company's marginal corporate tax rate is 30% both this year and next year.
What are the incremental earnings this year and next associated with the investment?
