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Michelle Walker, VP of marketing for Clinton Electronics has developed a marketing plan for presentation...

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Accounting

Michelle Walker, VP of marketing for Clinton Electronics has developed a marketing plan for presentation to the company's president. The plan calls for television ads, something the company has never used. As part of her presentation, she will indicate the impact of the TV ads on company profit as follows: Incremental sales from increased exposure Less: Incremental cost of goods sold Cost of TV ads Incremental profit $4,380,300 Incremental profit 3,190,000 $ $9,420,000 7,570,300 While Michelle is quite confident in the cost of the ads and the incremental cost of goods sold if sales are $9,420,000, she is quite uncertain about the sales increase. In fact, she believes that her estimate is on the high side. However, she also believes that if she puts in a more conservative estimate, such as $7,290,000, the president will not go along with the TV ads even though they still will generate substantial profits at $7,290,000 of incremental sales. $1,849,700 Calculate incremental profit or loss that will be generated if sales are only $7,290,000 (round calculations to 3 decimal points)

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