Data concerning Hogarth Corporation's single product appear below: 
Fixed expenses are $96,000 per month.The company is currently selling 1,000 units per month.
Required:
The marketing manager believes that a $12,000 increase in the monthly advertising budget would result in a 110 unit increase in monthly sales.What should be the overall effect on the company's monthly net operating income of this change? Show your work!
Definitions:
Present Value
The present value of a future amount of money or a series of cash flows, discounted by a certain rate of return.
Net Present Value Rule
A principle that states an investment should be made if the net present value of its cash flows, discounted at the hurdle rate, is positive.
Invest
The act of allocating resources, usually money, with the expectation of generating an income or profit.
Cost of Capital
The rate of return that a company must earn on its investment projects to maintain its market value and attract funds.
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