fin 302 case study

8/11/2019 Fin 302 Case Study

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Exhibit 1

Operatting Results 2003 2004 2005 2006 2007

Revenue 503.4 543.7 587.2 636.1 680.7

COGS 405.2 432.3 496.2 513.4 558.2

Gross 98.2 111.4 91 122.7 122.5

SG&A Expense 37.8 44.6 45.8 51.5 49

EBITDA 60.4 66.8 45.2 71.2 73.5

Depr expense 6.8 6.2 6 5.9 6.1

EBIT 53.6 60.6 39.2 65.3 67.4

Int expense 5.5 5.8 5.9 5.3 3.3

EBT 48.1 54.8 33.3 60 64.1

Taxes 19.2 22 13.3 24 25.6

Net Income 28.9 32.8 20 36 38.5

Assets 2003 2004 2005 2006 2007

Cash & equivalent 4.3 5.1 4.8 7.8 5

Accts Receivable 62.1 70.1 78.8 87.1 93.3

Inventory 57.7 58 61.2 61.9 67.3

Total CA 124.1 133.2 144.8 156.8 165.6

Liabilites & Equity

PP&E 201.4 202.9 203.1 202.3 204.4

Other Non-current 12.3 12.1 11.8 12.5 10.8

Total Assets 337.8 348.2 359.7 371.6 380.8

AP and Accrued exp 42.2 45 51.6 53.4 58.1

LT Debt 91.6 82.8 73.8 65.8 54.8

Total Equity 204 220.4 234.3 252.4 267.9

Total Liab and Equity 337.8 348.2 359.7 371.6 380.8

2003 2004 2005 2006 2007

Accts Receivable 62.1 70.1 78.8 87.1 93.3

Inventory 57.7 58 61.2 61.9 67.3

Accts Payable 42.2 45 51.6 53.4 58.1

NWC 77.6 83.1 88.4 95.6 102.5

Exhibit 4


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Channel 2003 2004 2005 2006 2007

Mass Merchant 170 193 220 247 268

Grocery 91 92 92 92 94

Club 136 141 149 159 167

Drug 55 60 66 73 80

Dollar 22 24 26 29 32

Other 31 33 34 37 40

Total 505 543 587 637 681

Exhibit 5

Year 1 Est Annual Growth

Selling price/unit $1.77 2.00%

Raw material/unit $0.94 1.00%

Manufacturing Overhead $3,920,000 3.00%

Maintenance expense $2,250,000 3.00%Hourly labor cost $20.00 3.50%

Manager salary 160,000 3.50%

WACC Calculation

10 year US Treasury 3.75%

Market Risk Premium 5.00%

Total Debt 2008 49.8

Component Amount Est Life Salvage

Faculty expansion 10,000,000 20 noneManufacturing equip 20,000,000 10 $5,500

Purchase equip 15,000,000 10 $4,200

Exhibit 6

Market Value Enterprise Value EBITDA/EV EBIT/EV P/E

Cathleen Sinclair 298.9 1628.5 6.4 10 13.9

General Health & Beauty 319.3 382.4 6.2 7.4 13.4

Women's Care Company 498.6 553.9 10.5 11.2 6.5

Skin Care Enterprises 1204.2 1576.1 10.1 12.6 18.4Average 8.3 10.3 13.1

Exhibit 7

Debt to Value Debt to Equity Equity Beta Asset Beta

Cathleen Sinclair 81.60% 4.4490 2.22 0.605


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General Health & Beauty 16.50% 0.1980 1.95 1.743

Women's Care Company 10% 0.1110 1.14 1.069

Skin Care Enterprises 23.60% 0.3090 1.35 1.139

Average 32.925% 1.267 1.665 1.139

Debt to Value Debt to Equit Asset Beta Equity Beta Cost of Equit Cost of Debt

0% 0.000% 1.139 1.139 9.444% 7.75%

5% 5.263% 1.139 1.175 9.624% 7.75%

10% 11.111% 1.139 1.215 9.824% 7.75%

15% 17.647% 1.139 1.259 10.047% 7.75%

20% 25.000% 1.139 1.310 10.299% 7.75%

25% 33.333% 1.139 1.367 10.583% 7.75%


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Cash for Operations 2003 2004 2005

Net Income 28.9 32.8 20

Depreciation 6.8 6.2 6

Less: Inc in AR 3.1 8 8.7

Less: Inc in Inv 0.5 0.3 3.2

Plus: Inc in AP & Accr 0.3 2.8 6.6

Total Cash from Operations 32.4 33.5 20.7

Cash from Investing

Capital expenditures 7.3 7.7 6.2

Other Non-current 0.5 -0.2 -0.2

Total Cash used in Investments 7.8 7.5 6

Cash from Financing

Repayment of debt 8 8.8 9

Dividend payments 14.4 16.4 6.1

Cash used in Financing 22.4 25.2 15.1

Total cash generated 2.2 0.8 -0.4

HCL Ratios 2003 2004 2005

Rev growth (%) 8.006% 8.001%

Gross Margin 19.507% 20.489% 15.497%

SGA/Rev 7.509% 8.203% 7.800%

EBITDA margin 11.998% 12.286% 7.698%

EBIT margin 9.555% 10.079% 5.671%

Net margin 5.741% 6.033% 3.406%

Effective Tax 39.917% 40.146% 39.940%

Market Share (%)

2003 2004 2005

Days Sales Out 44.410 46.415 48.311

Days Inventory Out 51.264 48.300 44.401

Days Payable Out 37.493 37.474 37.437


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P/B

NM

1.6

11.4

3.85.6


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WACC

9.444%

9.375%

9.307%

9.238%

9.169%

9.100%


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2006 2007

36 38.5

5.9 6.1

8.3 6.2

0.7 5.4

1.8 4.7

34.7 37.7

5.1 8.2

-0.7 -1.7

4.4 6.5

8 11

17.9 23

25.9 34

4.4 -2.8

2006 2007 Average

8.328% 7.011% 7.836%

19.289% 17.996% 18.556%

8.096% 7.198% 7.761%

11.193% 10.798% 10.795%

9.432% 9.417% 8.831%

5.659% 5.656% 5.299%

40.000% 39.938% 39.988%

3.151%

2006 2007 Average

49.294 49.343 47.555

43.405 43.404 46.155

37.444 37.470 37.464


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Exhibit 5





Maintenance expense $2,250,000 3.00%

Hourly labor cost $20.00 3.50%


sga of sales 7.76%


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Year 0 1 2

Max Cap 80,000,000.00 80,000,000.00

Cap Percentage 60% 65.00%

Units 48,000,000.00 52,000,000.00

Price $1.77 $1.81

Operatting Results 2008 2009 2010

Revenue $84,960,000.00 $93,880,800.00

COGS ($68,770,000.00) ($76,772,500.00)

Gross $16,190,000.00 $17,108,300.00

SG&A Expense ($6,592,896.00) ($7,285,150.08)

Managers Expense (Fixed) (640,000.00)$ (662,400.00)$

EBITDA $9,597,104.00 $9,823,149.92

Depr Expense (4,000,000.00)$ (4,000,000.00)$

EBIT 4,957,104.00$ $5,823,149.92

Taxes ($1,982,841.60) ($2,329,259.97)Net Income $2,974,262.40 $3,493,889.95

Cap Ex (45,000,000.00)$

NWC ($12,883,140.22) ($1,371,600.21)

Depreciation 4,000,000.00$ 4,000,000.00$

Free Cash Flow (45,000,000.00)$ (5,908,877.82)$ 6,122,289.74$

Cummulative (45,000,000.00)$ (50,908,877.82)$ (44,786,588.08)$

WACC 9.238%

NPV (16,887,126.814)$

IRR 2.079%

Payback 11.389

MIRR 4.871%


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3 4 5 6 7

80,000,000.00 80,000,000.00 80,000,000.00 80,000,000.00 80,000,000.00

70.00% 75.00% 75.00% 75.00% 75.00%

56,000,000.00 60,000,000.00 60,000,000.00 60,000,000.00 60,000,000.00

$1.84 $1.88 $1.92 $1.95 $1.99

2011 2012 2013 2014 2015

$103,124,448.00 $112,700,289.60 $114,954,295.39 $117,253,381.30 $119,598,448.93

($85,334,167.00) ($94,398,853.58) ($97,986,314.48) ($101,711,013.65) ($105,578,231.64)

$17,790,281.00 $18,301,436.02 $16,967,980.92 $15,542,367.65 $14,020,217.29

($8,002,457.16) ($8,745,542.47) ($8,920,453.32) ($9,098,862.39) ($9,280,839.64)

(1,028,376.00)$ (1,064,369.16)$ (1,468,829.44)$ (1,520,238.47)$ (1,573,446.82)$

$9,787,823.84 $9,555,893.55 $8,047,527.59 $6,443,505.26 $4,739,377.65

(4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$

$5,787,823.84 $5,555,893.55 $4,047,527.59 $2,443,505.26 $739,377.65

($2,315,129.53) ($2,222,357.42) ($1,619,011.04) ($977,402.10) ($295,751.06)$3,472,694.30 $3,333,536.13 $2,428,516.56 $1,466,103.16 $443,626.59

($1,427,746.58) ($1,483,771.96) ($384,353.88) ($393,621.99) ($403,136.67)

4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

6,044,947.72$ 5,849,764.17$ 6,044,162.68$ 5,072,481.17$ 4,040,489.92$

(38,741,640.35)$ (32,891,876.19)$ (26,847,713.51)$ (21,775,232.34)$ (17,734,742.42)$


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8 9 10

80,000,000.00 80,000,000.00 80,000,000.00

75.00% 75.00% 75.00%

60,000,000.00 60,000,000.00 60,000,000.00

$2.03 $2.07 $2.12

2016 2017 2018

$121,990,417.90 $124,430,226.26 $126,918,830.79

($109,593,453.20) ($113,762,375.21) ($118,090,914.96)

$12,396,964.71 $10,667,851.05 $8,827,915.83

($9,466,456.43) ($9,655,785.56) ($9,848,901.27)

(1,628,517.46)$ (1,685,515.57)$ (1,744,508.61)$

$2,930,508.28 $1,012,065.49 ($1,020,985.44)

(4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$

($1,069,491.72) ($2,987,934.51) ($5,020,985.44)

$427,796.69 $1,195,173.80 $2,008,394.18($641,695.03) ($1,792,760.70) ($3,012,591.26)

8,245.00$

($412,905.25) ($422,935.27) $19,183,212.03

4,000,000.00$ 4,000,000.00$ 4,000,000.00$

2,945,399.72$ 1,784,304.02$ 20,178,865.76$

(14,789,342.70)$ (13,005,038.68)$ 7,173,827.08$


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Year 0 1 2 3

Manager 4 4 6

Salary 160,000.00$ 165,600.00$ 171,396.00$

Total Cost 640,000.00$ 662,400.00$ 1,028,376.00$

HOURLY

Cost/Hour $20.00 20.70$ 21.42$

Hours 2,000.00 2,000.00 2,000.00

Cost/Worker $40,000.00 $41,400.00 $42,849.00

# of Workers 437 473 510

Total Cost $17,480,000.00 $19,582,200.00 $21,852,990.00

Material

Raw Material 0.94$ 0.98$ 1.02$

Units 48,000,000.00$ 52,000,000.00$ 56,000,000.00$

Total 45,120,000.00$ 50,835,200.00$ 56,935,424.00$

Manufacturing Overhead 3,920,000.00$ 4,037,600.00$ 4,158,728.00$Maintenence Expense 2,250,000.00$ 2,317,500.00$ 2,387,025.00$

Total 6,170,000.00$ 6,355,100.00$ 6,545,753.00$

Depreciation

Facilty Expansion 500,000.00$ 500,000.00$ 500,000.00$

Manufacturing Equipment 2,000,000.00$ 2,000,000.00$ 2,000,000.00$

Packing Equipment 1,500,000.00$ 1,500,000.00$ 1,500,000.00$

Total 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

Days Sales Out 47.555 47.555 47.555


Days Payable Out 37.464 37.464 37.464

NWC

Accounts Receivable $11,222,904.50 $12,401,309.47 $13,622,361.48

Inventory 8,816,824.69$ 9,842,804.62$ 10,940,473.91$

Accounts Payable ($7,156,588.97) ($7,989,373.66) ($8,880,348.38)

NWC $12,883,140.22 $14,254,740.43 $15,682,487.01

Recover ($12,883,140.22) ($14,254,740.43)

Change in NWC $12,883,140.22 $1,371,600.21 $1,427,746.58


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4 5 6 7 8

6 8 8 8 8

177,394.86$ 183,603.68$ 190,029.81$ 196,680.85$ 203,564.68$

1,064,369.16$ 1,468,829.44$ 1,520,238.47$ 1,573,446.82$ 1,628,517.46$

22.17$ 22.95$ 23.75$ 24.59$ 25.45$

2,000.00 2,000.00 2,000.00 2,000.00 2,000.00

$44,348.72 $45,900.92 $47,507.45 $49,170.21 $50,891.17

546 546 546 546 546

$24,214,398.39 $25,061,902.33 $25,939,068.92 $26,846,936.33 $27,786,579.10

1.06$ 1.10$ 1.14$ 1.19$ 1.24$

60,000,000.00$ 60,000,000.00$ 60,000,000.00$ 60,000,000.00$ 60,000,000.00$

63,442,329.60$ 65,980,022.78$ 68,619,223.70$ 71,363,992.64$ 74,218,552.35$

4,283,489.84$ 4,411,994.54$ 4,544,354.37$ 4,680,685.00$ 4,821,105.55$2,458,635.75$ 2,532,394.82$ 2,608,366.67$ 2,686,617.67$ 2,767,216.20$

6,742,125.59$ 6,944,389.36$ 7,152,721.04$ 7,367,302.67$ 7,588,321.75$

500,000.00$ 500,000.00$ 500,000.00$ 500,000.00$ 500,000.00$

2,000,000.00$ 2,000,000.00$ 2,000,000.00$ 2,000,000.00$ 2,000,000.00$

1,500,000.00$ 1,500,000.00$ 1,500,000.00$ 1,500,000.00$ 1,500,000.00$

4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

47.555 47.555 47.555 47.555 47.555

46.155 46.155 46.155 46.155 46.155

37.464 37.464 37.464 37.464 37.464

$14,887,295.04 $15,185,040.95 $15,488,741.76 $15,798,516.60 $16,114,486.93

12,102,634.04$ 12,562,573.17$ 13,040,107.26$ 13,535,913.33$ 14,050,694.55$

($9,823,670.12) ($10,197,001.27) ($10,584,614.19) ($10,987,058.42) ($11,404,904.73)

$17,166,258.97 $17,550,612.85 $17,944,234.83 $18,347,371.51 $18,760,276.76

($15,682,487.01) ($17,166,258.97) ($17,550,612.85) ($17,944,234.83) ($18,347,371.51)

$1,483,771.96 $384,353.88 $393,621.99 $403,136.67 $412,905.25


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9 10

8 8

210,689.45$ 218,063.58$

1,685,515.57$ 1,744,508.61$

26.34$ 27.26$

2,000.00 2,000.00

$52,672.36 $54,515.89

546 546

$28,759,109.37 $29,765,678.20

1.29$ 1.34$

60,000,000.00$ 60,000,000.00$

77,187,294.44$ 80,274,786.22$

4,965,738.72$ 5,114,710.88$2,850,232.68$ 2,935,739.66$

7,815,971.40$ 8,050,450.54$

500,000.00$ 500,000.00$ -$

2,000,000.00$ 2,000,000.00$ 4,675.00$

1,500,000.00$ 1,500,000.00$ 3,570.00$

4,000,000.00$ 4,000,000.00$ 8,245.00$

47.555 47.555

46.155 46.155

37.464 37.464

$16,436,776.67 $16,765,512.20

14,585,181.31$ 15,140,132.25$

($11,838,745.95) ($12,289,197.89)

$19,183,212.03 $19,616,446.56

($18,760,276.76) ($19,183,212.03) ($19,616,446.56)

$422,935.27 ($19,183,212.03) ($19,616,446.56)


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Exhibit 5








sga of sales 7.76%


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Year 0 1 2

Max Cap 80,000,000.00 80,000,000.00


Units 48,000,000.00 52,000,000.00

Price $1.77 $1.81


Revenue $84,960,000.00 $93,880,800.00

COGS ($68,770,000.00) ($75,306,100.00)

Gross $16,190,000.00 $18,574,700.00

SG&A Expense ($6,592,896.00) ($7,285,150.08)


EBITDA $9,597,104.00 $11,289,549.92

Depr Expense (4,000,000.00)$ (4,000,000.00)$

EBIT 4,957,104.00$ $7,289,549.92

Taxes ($1,982,841.60) ($2,915,819.97)Net Income $2,974,262.40 $4,373,729.95

Cap Ex (45,000,000.00)$

NWC ($12,883,140.22) ($1,336,198.58)

Depreciation 4,000,000.00$ 4,000,000.00$

Free Cash Flow (45,000,000.00)$ (5,908,877.82)$ 7,037,531.37$

Cummulative (45,000,000.00)$ (50,908,877.82)$ (43,871,346.45)$

WACC 9.238%

NPV 6,626,430.986$

IRR 11.577%

Payback 6.402

MIRR 10.595%


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3 4 5 6 7

80,000,000.00 80,000,000.00 80,000,000.00 80,000,000.00 80,000,000.00

70.00% 75.00% 80.00% 85.00% 85.00%

56,000,000.00 60,000,000.00 64,000,000.00 68,000,000.00 68,000,000.00

$1.84 $1.88 $1.92 $1.95 $1.99

2011 2012 2013 2014 2015

$103,124,448.00 $112,700,289.60 $122,617,915.08 $132,887,165.47 $135,544,908.78

($82,096,807.00) ($89,065,500.38) ($96,261,462.05) ($103,740,396.37) ($105,656,032.58)

$21,027,641.00 $23,634,789.22 $26,356,453.03 $29,146,769.10 $29,888,876.21

($8,002,457.16) ($8,745,542.47) ($9,515,150.21) ($10,312,044.04) ($10,518,284.92)

(1,028,376.00)$ (1,064,369.16)$ (1,468,829.44)$ (1,520,238.47)$ (1,573,446.82)$

$13,025,183.84 $14,889,246.75 $16,841,302.82 $18,834,725.06 $19,370,591.28

(4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$

$9,025,183.84 $10,889,246.75 $12,841,302.82 $14,834,725.06 $15,370,591.28

($3,610,073.53) ($4,355,698.70) ($5,136,521.13) ($5,933,890.03) ($6,148,236.51)$5,415,110.30 $6,533,548.05 $7,704,781.69 $8,900,835.04 $9,222,354.77

($1,384,992.31) ($1,433,170.79) ($1,483,805.86) ($1,537,085.71) ($397,325.17)

4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

8,030,117.99$ 9,100,377.26$ 10,220,975.83$ 11,363,749.33$ 12,825,029.60$

(35,841,228.46)$ (26,740,851.20)$ (16,519,875.37)$ (5,156,126.05)$ 7,668,903.56$


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8 9 10

80,000,000.00 80,000,000.00 80,000,000.00

85.00% 85.00% 85.00%

68,000,000.00 68,000,000.00 68,000,000.00

$2.03 $2.07 $2.12

2016 2017 2018

$138,255,806.96 $141,020,923.10 $143,841,341.56

($107,620,848.00) ($109,636,363.78) ($111,704,151.64)

$30,634,958.96 $31,384,559.32 $32,137,189.92

($10,728,650.62) ($10,943,223.63) ($11,162,088.11)

(1,628,517.46)$ (1,685,515.57)$ (1,744,508.61)$

$19,906,308.34 $20,441,335.68 $20,975,101.81

(4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$

$15,906,308.34 $16,441,335.68 $16,975,101.81

($6,362,523.33) ($6,576,534.27) ($6,790,040.73)$9,543,785.00 $9,864,801.41 $10,185,061.09

8,245.00$

($405,534.01) ($413,920.00)

4,000,000.00$ 4,000,000.00$ 4,000,000.00$

13,138,250.99$ 13,450,881.41$ 14,193,306.09$

20,807,154.55$ 34,258,035.96$ 48,451,342.04$


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Year 0 1 2 3

Manager 4 4 6

Salary 160,000.00$ 165,600.00$ 171,396.00$

Total Cost 640,000.00$ 662,400.00$ 1,028,376.00$

HOURLY

Cost/Hour $20.00 20.70$ 21.42$

Hours 2,000.00 2,000.00 2,000.00

Cost/Worker $40,000.00 $41,400.00 $42,849.00

# of Workers 437 473 510

Total Cost $17,480,000.00 $19,582,200.00 $21,852,990.00

Material

Raw Material 0.94$ 0.95$ 0.96$

Units 48,000,000.00$ 52,000,000.00$ 56,000,000.00$

Total 45,120,000.00$ 49,368,800.00$ 53,698,064.00$


Total 6,170,000.00$ 6,355,100.00$ 6,545,753.00$

Depreciation




Total 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

Days Sales Out 47.555 47.555 47.555


Days Payable Out 37.464 37.464 37.464

NWC


Inventory 8,816,824.69$ 9,654,801.25$ 10,525,420.31$


NWC $12,883,140.22 $14,219,338.81 $15,604,331.11

Recover ($12,883,140.22) ($14,219,338.81)

Change in NWC $12,883,140.22 $1,336,198.58 $1,384,992.31


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4 5 6 7 8

6 8 8 8 8

177,394.86$ 183,603.68$ 190,029.81$ 196,680.85$ 203,564.68$

1,064,369.16$ 1,468,829.44$ 1,520,238.47$ 1,573,446.82$ 1,628,517.46$

22.17$ 22.95$ 23.75$ 24.59$ 25.45$

2,000.00 2,000.00 2,000.00 2,000.00 2,000.00

$44,348.72 $45,900.92 $47,507.45 $49,170.21 $50,891.17

546 582 619 619 619

$24,214,398.39 $26,714,335.45 $29,407,112.93 $30,436,361.88 $31,501,634.55

0.97$ 0.98$ 0.99$ 1.00$ 1.01$

60,000,000.00$ 64,000,000.00$ 68,000,000.00$ 68,000,000.00$ 68,000,000.00$

58,108,976.40$ 62,602,737.24$ 67,180,562.40$ 67,852,368.03$ 68,530,891.71$

4,283,489.84$ 4,411,994.54$ 4,544,354.37$ 4,680,685.00$ 4,821,105.55$2,458,635.75$ 2,532,394.82$ 2,608,366.67$ 2,686,617.67$ 2,767,216.20$

6,742,125.59$ 6,944,389.36$ 7,152,721.04$ 7,367,302.67$ 7,588,321.75$

500,000.00$ 500,000.00$ 500,000.00$ 500,000.00$ 500,000.00$

2,000,000.00$ 2,000,000.00$ 2,000,000.00$ 2,000,000.00$ 2,000,000.00$

1,500,000.00$ 1,500,000.00$ 1,500,000.00$ 1,500,000.00$ 1,500,000.00$

4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

47.555 47.555 47.555 47.555 47.555

46.155 46.155 46.155 46.155 46.155

37.464 37.464 37.464 37.464 37.464

$14,887,295.04 $16,197,377.01 $17,553,907.33 $17,904,985.48 $18,263,085.19

11,418,858.56$ 12,341,434.28$ 13,300,289.20$ 13,545,887.99$ 13,797,791.91$

($9,268,651.70) ($10,017,503.52) ($10,795,803.05) ($10,995,154.82) ($11,199,624.45)

$17,037,501.90 $18,521,307.77 $20,058,393.48 $20,455,718.65 $20,861,252.65

($15,604,331.11) ($17,037,501.90) ($18,521,307.77) ($20,058,393.48) ($20,455,718.65)

$1,433,170.79 $1,483,805.86 $1,537,085.71 $397,325.17 $405,534.01


21/63

9 10

8 8

210,689.45$ 218,063.58$

1,685,515.57$ 1,744,508.61$

26.34$ 27.26$

2,000.00 2,000.00

$52,672.36 $54,515.89

619 619

$32,604,191.76 $33,745,338.47

1.02$ 1.03$

68,000,000.00$ 68,000,000.00$

69,216,200.62$ 69,908,362.63$

4,965,738.72$ 5,114,710.88$2,850,232.68$ 2,935,739.66$

7,815,971.40$ 8,050,450.54$

500,000.00$ 500,000.00$ -$

2,000,000.00$ 2,000,000.00$ 4,675.00$

1,500,000.00$ 1,500,000.00$ 3,570.00$

4,000,000.00$ 4,000,000.00$ 8,245.00$

47.555 47.555

46.155 46.155

37.464 37.464

$18,628,346.89 $19,000,913.83

14,056,196.00$ 14,321,301.76$

($11,409,370.24) ($11,624,555.75)

$21,275,172.66 $21,697,659.84

($20,861,252.65) ($21,275,172.66) ($21,697,659.84)

$413,920.00 ($21,275,172.66) ($21,697,659.84)


22/63

Exhibit 5








sga of sales 7.76%


23/63


24/63

Year 0 1 2

Max Cap 80,000,000.00 80,000,000.00


Units 48,000,000.00 52,000,000.00

Price $1.77 $1.81


Revenue $84,960,000.00 $93,880,800.00

COGS (45,120,000.00)$ (49,368,800.00)$

Gross $39,840,000.00 $44,512,000.00

fixed cost (23,650,000.00) (25,937,300.00)

SG&A Expense ($6,592,896.00) ($7,285,150.08)


EBITDA $8,957,104.00 $10,627,149.92

Depr Expense (4,000,000.00)$ (4,000,000.00)$

EBIT 4,317,104.00$ $6,627,149.92Taxes ($1,726,841.60) ($2,650,859.97)

Net Income $2,590,262.40 $3,976,289.95

Cap Ex (45,000,000.00)$

NWC ($12,312,185.23) ($1,280,978.91)

Depreciation 4,000,000.00$ 4,000,000.00$

Free Cash Flow (45,000,000.00)$ (5,721,922.83)$ 6,695,311.04$

Cummulative (45,000,000.00)$ (50,721,922.83)$ (44,026,611.78)$

WACC 9.238%

NPV 237,885,925.796$

IRR 33.693%

Payback 6.646

MIRR 30.085%


25/63


26/63

3 4 5 6 7

80,000,000.00 80,000,000.00 80,000,000.00 80,000,000.00 80,000,000.00

70.00% 75.00% 80.00% 90.00% 90.00%

56,000,000.00 60,000,000.00 64,000,000.00 72,000,000.00 72,000,000.00

$1.84 $1.88 $1.92 $1.95 $1.99

2011 2012 2013 2014 2015

$103,124,448.00 $112,700,289.60 $122,617,915.08 $140,704,057.56 $143,518,138.71

(53,698,064.00)$ (58,108,976.40)$ (62,602,737.24)$ (71,132,360.19)$ (71,843,683.79)$

$49,426,384.00 $54,591,313.20 $60,015,177.84 $69,571,697.37 $71,674,454.92

(28,398,743.00) (30,956,523.98) (33,658,724.81) (38,270,102.25) (39,573,792.22)

($8,002,457.16) ($8,745,542.47) ($9,515,150.21) ($10,918,634.87) ($11,137,007.56)

(1,028,376.00)$ (1,064,369.16)$ (1,468,829.44)$ (1,520,238.47)$ (1,573,446.82)$

$11,996,807.84 $13,824,877.59 $15,372,473.38 $18,862,721.78 $19,390,208.32

(4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$

$7,996,807.84 $9,824,877.59 $11,372,473.38 $14,862,721.78 $15,390,208.32($3,198,723.13) ($3,929,951.03) ($4,548,989.35) ($5,945,088.71) ($6,156,083.33)

$4,798,084.70 $5,894,926.55 $6,823,484.03 $8,917,633.07 $9,234,124.99

($1,325,568.50) ($1,371,421.20) ($1,418,569.71) ($2,595,034.07) ($388,902.48)

4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

7,472,516.21$ 8,523,505.36$ 9,404,914.32$ 10,322,599.00$ 12,845,222.51$

(36,554,095.58)$ (28,030,590.22)$ (18,625,675.90)$ (8,303,076.91)$ 4,542,145.61$


27/63


28/63

8 9 10

80,000,000.00 80,000,000.00 80,000,000.00

90.00% 90.00% 90.00%

72,000,000.00 72,000,000.00 72,000,000.00

$2.03 $2.07 $2.12

2016 2017 2018

$146,388,501.49 $149,316,271.51 $152,302,596.95

(72,562,120.63)$ (73,287,741.84)$ (74,020,619.26)$

$73,826,380.85 $76,028,529.68 $78,281,977.69

(39,600,000.00) (39,600,000.00) (39,600,000.00)

($11,359,747.72) ($11,586,942.67) ($11,818,681.52)

(1,628,517.46)$ (1,685,515.57)$ (1,744,508.61)$

$21,238,115.68 $23,156,071.44 $25,118,787.55

(4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$

$17,238,115.68 $19,156,071.44 $21,118,787.55($6,895,246.27) ($7,662,428.58) ($8,447,515.02)

$10,342,869.41 $11,493,642.86 $12,671,272.53

($396,508.80) ($404,265.53) $21,493,434.42

4,000,000.00$ 4,000,000.00$ 4,000,000.00$

537,836,668.29$

13,946,360.61$ 15,089,377.33$ $576,001,375.25

18,488,506.22$ 33,577,883.55$ 609,579,258.80$


29/63


30/63

Year 0 1 2

Manager 4 4

Salary 160,000.00$ 165,600.00$

Total Cost 640,000.00$ 662,400.00$

HOURLY

Cost/Hour $20.00 20.70$

Hours 2,000.00 2,000.00

Cost/Worker $40,000.00 $41,400.00

# of Workers 437 473

Total Cost $17,480,000.00 $19,582,200.00

Material

Raw Material 0.94$ 0.95$

Units 48,000,000.00$ 52,000,000.00$

Total 45,120,000.00$ 49,368,800.00$

Manufacturing Overhead 3,920,000.00$ 4,037,600.00$

Maintenence Expense 2,250,000.00$ 2,317,500.00$

Total 6,170,000.00$ 6,355,100.00$

Depreciation

Facilty Expansion 500,000.00$ 500,000.00$

Manufacturing Equipment 2,000,000.00$ 2,000,000.00$

Packing Equipment 1,500,000.00$ 1,500,000.00$

Total 4,000,000.00$ 4,000,000.00$

Days Sales Out 47.555 47.555

Days Inventory Out 46.155 46.155

Days Payable Out 37.464 37.464

NWC

Accounts Receivable $11,222,904.50 $12,401,309.47

Inventory 5,784,719.06$ 6,329,446.78$

Accounts Payable ($4,695,438.33) ($5,137,592.11)

NWC $12,312,185.23 $13,593,164.14

Recover ($12,312,185.23)

Change in NWC $12,312,185.23 $1,280,978.91


31/63

total fixed cost per year 23,650,000.00$ 25,937,300.00$

per unit 0.492708333 0.498794231

new cogs 23,650,000.00 25,937,300.00


32/63

3 4 5 6 7

6 6 8 8 8

171,396.00$ 177,394.86$ 183,603.68$ 190,029.81$ 196,680.85$

1,028,376.00$ 1,064,369.16$ 1,468,829.44$ 1,520,238.47$ 1,573,446.82$

21.42$ 22.17$ 22.95$ 23.75$ 24.59$

2,000.00 2,000.00 2,000.00 2,000.00 2,000.00

$42,849.00 $44,348.72 $45,900.92 $47,507.45 $49,170.21

510 546 582 655 655

$21,852,990.00 $24,214,398.39 $26,714,335.45 $31,117,381.21 $32,206,489.55

0.96$ 0.97$ 0.98$ 0.99$ 1.00$

56,000,000.00$ 60,000,000.00$ 64,000,000.00$ 72,000,000.00$ 72,000,000.00$

53,698,064.00$ 58,108,976.40$ 62,602,737.24$ 71,132,360.19$ 71,843,683.79$

4,158,728.00$ 4,283,489.84$ 4,411,994.54$ 4,544,354.37$ 4,680,685.00$

2,387,025.00$ 2,458,635.75$ 2,532,394.82$ 2,608,366.67$ 2,686,617.67$

6,545,753.00$ 6,742,125.59$ 6,944,389.36$ 7,152,721.04$ 7,367,302.67$

500,000.00$ 500,000.00$ 500,000.00$ 500,000.00$ 500,000.00$

2,000,000.00$ 2,000,000.00$ 2,000,000.00$ 2,000,000.00$ 2,000,000.00$

1,500,000.00$ 1,500,000.00$ 1,500,000.00$ 1,500,000.00$ 1,500,000.00$

4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

47.555 47.555 47.555 47.555 47.555

46.155 46.155 46.155 46.155 46.155

37.464 37.464 37.464 37.464 37.464

$13,622,361.48 $14,887,295.04 $16,197,377.01 $18,586,490.12 $18,958,219.92

6,884,490.57$ 7,450,002.30$ 8,026,135.81$ 9,119,696.81$ 9,210,893.78$

($5,588,119.42) ($6,047,143.51) ($6,514,789.28) ($7,402,429.32) ($7,476,453.61)

$14,918,732.63 $16,290,153.83 $17,708,723.54 $20,303,757.61 $20,692,660.09

($13,593,164.14) ($14,918,732.63) ($16,290,153.83) ($17,708,723.54) ($20,303,757.61)

$1,325,568.50 $1,371,421.20 $1,418,569.71 $2,595,034.07 $388,902.48


33/63

28,398,743.00$ 30,956,523.98$ 33,658,724.81$ 38,270,102.25$ 39,573,792.22$

0.507120411 0.515942066 0.525917575 0.531529198 0.549636003

28,398,743.00 30,956,523.98 33,658,724.81 38,270,102.25 39,573,792.22


34/63

8 9 10

8 8 8

203,564.68$ 210,689.45$ 218,063.58$

1,628,517.46$ 1,685,515.57$ 1,744,508.61$

25.45$ 26.34$ 27.26$

2,000.00 2,000.00 2,000.00

$50,891.17 $52,672.36 $54,515.89

655 655 655

$33,333,716.68 $34,500,396.77 $35,707,910.66

1.01$ 1.02$ 1.03$

72,000,000.00$ 72,000,000.00$ 72,000,000.00$

72,562,120.63$ 73,287,741.84$ 74,020,619.26$

4,821,105.55$ 4,965,738.72$ 5,114,710.88$

2,767,216.20$ 2,850,232.68$ 2,935,739.66$

7,588,321.75$ 7,815,971.40$ 8,050,450.54$

500,000.00$ 500,000.00$ 500,000.00$ -$

2,000,000.00$ 2,000,000.00$ 2,000,000.00$ 4,675.00$

1,500,000.00$ 1,500,000.00$ 1,500,000.00$ 3,570.00$

4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 8,245.00$

47.555 47.555 47.555

46.155 46.155 46.155

37.464 37.464 37.464

$19,337,384.32 $19,724,132.00 $20,118,614.64

9,303,002.72$ 9,396,032.74$ 9,489,993.07$

($7,551,218.15) ($7,626,730.33) ($7,702,997.63)

$21,089,168.89 $21,493,434.42 $21,905,610.09

($20,692,660.09) ($21,089,168.89) ($21,493,434.42) ($21,905,610.09)

$396,508.80 $404,265.53 ($21,493,434.42) ($21,905,610.09)


35/63

40,922,038.43$ 42,316,368.17$ 43,758,361.20$

0.568361645 0.587727336 0.607755017

39,600,000.00 39,600,000.00 39,600,000.00


36/63

NPV IRR Probability

Best Case $237,885,925.796 33.693% 25%

Base $6,626,430.986 11.577% 50%

Worst Case -$16,887,126.814 2.079% 25%

Expected Value $58,562,915.239 14.732%

Standard Deviation 103,976,256.610$ 11.614%

Coefficient of Variation 1.775 0.788

Risk Free Rate 3.75%

Sharpe Ratio 0.946


37/63

Exhibit 5








sga of sales 7.76%

Selling Price

1.77$

-20% 1.42$-15% 1.50$

-10% 1.59$

-5% 1.68$

0% 1.77$

5% 1.86$

10% 1.95$

15% 2.04$


38/63

20% 2.12$

-20% -15%

selling price (71,796,450.76)$ (52,190,730.32)$

direct material (38,648,185.91)$ (27,329,531.68)$

$(80,000,000.

$(60,000,000.

$(40,000,000.

$(20,000,000.

$

$20,000,000.

$40,000,000.

$60,000,000.

$80,000,000.

$100,000,000.


39/63

Year 0 1 2

Max Cap 80,000,000.00 80,000,000.00


Units 48,000,000.00 52,000,000.00

Price $1.77 $1.81


Revenue $84,960,000.00 $93,880,800.00

COGS ($68,770,000.00) ($75,306,100.00)

Gross $16,190,000.00 $18,574,700.00

SG&A Expense ($6,592,896.00) ($7,285,150.08)


EBITDA $9,597,104.00 $11,289,549.92

Depr Expense (4,000,000.00)$ (4,000,000.00)$

EBIT 4,957,104.00$ $7,289,549.92

Taxes ($1,982,841.60) ($2,915,819.97)Net Income $2,974,262.40 $4,373,729.95

Cap Ex (45,000,000.00)$

NWC ($12,883,140.22) ($1,336,198.58)

Depreciation 4,000,000.00$ 4,000,000.00$

Free Cash Flow (45,000,000.00)$ (5,908,877.82)$ 7,037,531.37$

Cummulative (45,000,000.00)$ (50,908,877.82)$ (43,871,346.45)$

WACC 9.238%

NPV 6,626,430.986$

IRR 11.577%

Payback 6.402

MIRR 10.595%

NPV

6,626,430.99$

(71,796,450.76)$ (52,190,730.32)$

(32,585,009.89)$

(12,979,289.45)$

6,626,430.99$

26,232,151.42$

45,837,871.86$

65,443,592.29$


40/63

85,049,312.73$

-10% -5% 0% 5%

(32,585,009.89)$ (12,979,289.45)$ 6,626,430.99$ 26,232,151.42$

(16,010,877.46)$ (4,692,223.24)$ 6,626,430.99$ 17,945,085.21$

y(selling price) = 2E+07x - 9E+07

y(direct materials) = 1E+07x - 5E+07

0)

0)

0)

0)

-

00

00

00

00

00

selling price

direct material

Linear (selling price)

Linear (direct material)


41/63

3 4 5 6 7

80,000,000.00 80,000,000.00 80,000,000.00 80,000,000.00 80,000,000.00

70.00% 75.00% 80.00% 85.00% 85.00%

56,000,000.00 60,000,000.00 64,000,000.00 68,000,000.00 68,000,000.00

$1.84 $1.88 $1.92 $1.95 $1.99

2011 2012 2013 2014 2015

$103,124,448.00 $112,700,289.60 $122,617,915.08 $132,887,165.47 $135,544,908.78

($82,096,807.00) ($89,065,500.38) ($96,261,462.05) ($103,740,396.37) ($105,656,032.58)

$21,027,641.00 $23,634,789.22 $26,356,453.03 $29,146,769.10 $29,888,876.21

($8,002,457.16) ($8,745,542.47) ($9,515,150.21) ($10,312,044.04) ($10,518,284.92)

(1,028,376.00)$ (1,064,369.16)$ (1,468,829.44)$ (1,520,238.47)$ (1,573,446.82)$

$13,025,183.84 $14,889,246.75 $16,841,302.82 $18,834,725.06 $19,370,591.28

(4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$

$9,025,183.84 $10,889,246.75 $12,841,302.82 $14,834,725.06 $15,370,591.28

($3,610,073.53) ($4,355,698.70) ($5,136,521.13) ($5,933,890.03) ($6,148,236.51)$5,415,110.30 $6,533,548.05 $7,704,781.69 $8,900,835.04 $9,222,354.77

($1,384,992.31) ($1,433,170.79) ($1,483,805.86) ($1,537,085.71) ($397,325.17)

4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

8,030,117.99$ 9,100,377.26$ 10,220,975.83$ 11,363,749.33$ 12,825,029.60$

(35,841,228.46)$ (26,740,851.20)$ (16,519,875.37)$ (5,156,126.05)$ 7,668,903.56$

Direct Material Cost NPV

0.94$ 6,626,430.99$

20% 1.128 (38,648,185.91)$15% 1.081 (27,329,531.68)$

10% 1.034 (16,010,877.46)$

5% 0.987 (4,692,223.24)$

0% 0.94 6,626,430.99$

-5% 0.893 17,945,085.21$

-10% 0.846 29,263,739.43$

-15% 0.799 40,582,393.65$


42/63

-20% 0.752 51,901,047.88$

10% 15% 20%

45,837,871.86$ 65,443,592.29$ 85,049,312.73$

29,263,739.43$ 40,582,393.65$ 51,901,047.88$


43/63

8 9 10

80,000,000.00 80,000,000.00 80,000,000.00

85.00% 85.00% 85.00%

68,000,000.00 68,000,000.00 68,000,000.00

$2.03 $2.07 $2.12

2016 2017 2018

$138,255,806.96 $141,020,923.10 $143,841,341.56

($107,620,848.00) ($109,636,363.78) ($111,704,151.64)

$30,634,958.96 $31,384,559.32 $32,137,189.92

($10,728,650.62) ($10,943,223.63) ($11,162,088.11)

(1,628,517.46)$ (1,685,515.57)$ (1,744,508.61)$

$19,906,308.34 $20,441,335.68 $20,975,101.81

(4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$

$15,906,308.34 $16,441,335.68 $16,975,101.81

($6,362,523.33) ($6,576,534.27) ($6,790,040.73)$9,543,785.00 $9,864,801.41 $10,185,061.09

8,245.00$

($405,534.01) ($413,920.00)

4,000,000.00$ 4,000,000.00$ 4,000,000.00$

13,138,250.99$ 13,450,881.41$ 14,193,306.09$

20,807,154.55$ 34,258,035.96$ 48,451,342.04$


44/63


45/63

Year 0 1 2 3

Manager 4 4 6

Salary 160,000.00$ 165,600.00$ 171,396.00$

Total Cost 640,000.00$ 662,400.00$ 1,028,376.00$

HOURLY

Cost/Hour $20.00 20.70$ 21.42$

Hours 2,000.00 2,000.00 2,000.00

Cost/Worker $40,000.00 $41,400.00 $42,849.00

# of Workers 437 473 510

Total Cost $17,480,000.00 $19,582,200.00 $21,852,990.00

Material

Raw Material 0.94$ 0.95$ 0.96$

Units 48,000,000.00$ 52,000,000.00$ 56,000,000.00$

Total 45,120,000.00$ 49,368,800.00$ 53,698,064.00$


Total 6,170,000.00$ 6,355,100.00$ 6,545,753.00$

Depreciation




Total 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

Days Sales Out 47.555 47.555 47.555


Days Payable Out 37.464 37.464 37.464

NWC


Inventory 8,816,824.69$ 9,654,801.25$ 10,525,420.31$


NWC $12,883,140.22 $14,219,338.81 $15,604,331.11

Recover ($12,883,140.22) ($14,219,338.81)

Change in NWC $12,883,140.22 $1,336,198.58 $1,384,992.31


46/63


47/63

4 5 6 7 8

6 8 8 8 8

177,394.86$ 183,603.68$ 190,029.81$ 196,680.85$ 203,564.68$

1,064,369.16$ 1,468,829.44$ 1,520,238.47$ 1,573,446.82$ 1,628,517.46$

22.17$ 22.95$ 23.75$ 24.59$ 25.45$

2,000.00 2,000.00 2,000.00 2,000.00 2,000.00

$44,348.72 $45,900.92 $47,507.45 $49,170.21 $50,891.17

546 582 619 619 619

$24,214,398.39 $26,714,335.45 $29,407,112.93 $30,436,361.88 $31,501,634.55

0.97$ 0.98$ 0.99$ 1.00$ 1.01$

60,000,000.00$ 64,000,000.00$ 68,000,000.00$ 68,000,000.00$ 68,000,000.00$

58,108,976.40$ 62,602,737.24$ 67,180,562.40$ 67,852,368.03$ 68,530,891.71$

4,283,489.84$ 4,411,994.54$ 4,544,354.37$ 4,680,685.00$ 4,821,105.55$2,458,635.75$ 2,532,394.82$ 2,608,366.67$ 2,686,617.67$ 2,767,216.20$

6,742,125.59$ 6,944,389.36$ 7,152,721.04$ 7,367,302.67$ 7,588,321.75$

500,000.00$ 500,000.00$ 500,000.00$ 500,000.00$ 500,000.00$

2,000,000.00$ 2,000,000.00$ 2,000,000.00$ 2,000,000.00$ 2,000,000.00$

1,500,000.00$ 1,500,000.00$ 1,500,000.00$ 1,500,000.00$ 1,500,000.00$

4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

47.555 47.555 47.555 47.555 47.555

46.155 46.155 46.155 46.155 46.155

37.464 37.464 37.464 37.464 37.464

$14,887,295.04 $16,197,377.01 $17,553,907.33 $17,904,985.48 $18,263,085.19

11,418,858.56$ 12,341,434.28$ 13,300,289.20$ 13,545,887.99$ 13,797,791.91$

($9,268,651.70) ($10,017,503.52) ($10,795,803.05) ($10,995,154.82) ($11,199,624.45)

$17,037,501.90 $18,521,307.77 $20,058,393.48 $20,455,718.65 $20,861,252.65

($15,604,331.11) ($17,037,501.90) ($18,521,307.77) ($20,058,393.48) ($20,455,718.65)

$1,433,170.79 $1,483,805.86 $1,537,085.71 $397,325.17 $405,534.01


48/63


49/63

9 10

8 8

210,689.45$ 218,063.58$

1,685,515.57$ 1,744,508.61$

26.34$ 27.26$

2,000.00 2,000.00

$52,672.36 $54,515.89

619 619

$32,604,191.76 $33,745,338.47

1.02$ 1.03$

68,000,000.00$ 68,000,000.00$

69,216,200.62$ 69,908,362.63$

4,965,738.72$ 5,114,710.88$2,850,232.68$ 2,935,739.66$

7,815,971.40$ 8,050,450.54$

500,000.00$ 500,000.00$ -$

2,000,000.00$ 2,000,000.00$ 4,675.00$

1,500,000.00$ 1,500,000.00$ 3,570.00$

4,000,000.00$ 4,000,000.00$ 8,245.00$

47.555 47.555

46.155 46.155

37.464 37.464

$18,628,346.89 $19,000,913.83

14,056,196.00$ 14,321,301.76$

($11,409,370.24) ($11,624,555.75)

$21,275,172.66 $21,697,659.84

($20,861,252.65) ($21,275,172.66) ($21,697,659.84)

$413,920.00 ($21,275,172.66) ($21,697,659.84)


50/63

Exhibit 5








sga of sales 7.76%


51/63

Year 0 1 2

Max Cap 80,000,000.00 80,000,000.00


Units 48,000,000.00 52,000,000.00

Price $1.74 $1.77


Revenue $83,524,241.55 $92,294,286.91

COGS ($68,770,000.00) ($75,306,100.00)

Gross $14,754,241.55 $16,988,186.91

SG&A Expense ($6,481,481.14) ($7,162,036.66)


EBITDA $8,272,760.40 $9,826,150.25

Depr Expense (4,000,000.00)$ (4,000,000.00)$

EBIT 3,632,760.40$ $5,826,150.25

Taxes ($1,453,104.16) ($2,330,460.10)Net Income $2,179,656.24 $3,495,690.15

Cap Ex (45,000,000.00)$

NWC ($12,693,481.79) ($1,316,284.45)

Depreciation 4,000,000.00$ 4,000,000.00$

Free Cash Flow (45,000,000.00)$ (6,513,825.55)$ 6,179,405.70$

Cummulative (45,000,000.00)$ (51,513,825.55)$ (45,334,419.85)$

WACC 9.238%

NPV (0.000)$

IRR 9.238%

Payback 6.946

MIRR 9.238%


52/63

3 4 5 6 7

80,000,000.00 80,000,000.00 80,000,000.00 80,000,000.00 80,000,000.00

70.00% 75.00% 80.00% 85.00% 85.00%

56,000,000.00 60,000,000.00 64,000,000.00 68,000,000.00 68,000,000.00

$1.81 $1.85 $1.88 $1.92 $1.96

2011 2012 2013 2014 2015

$101,381,724.39 $110,795,741.66 $120,545,766.92 $130,641,474.90 $133,254,304.40

($82,096,807.00) ($89,065,500.38) ($96,261,462.05) ($103,740,396.37) ($105,656,032.58)

$19,284,917.39 $21,730,241.28 $24,284,304.87 $26,901,078.53 $27,598,271.82

($7,867,221.81) ($8,597,749.55) ($9,354,351.51) ($10,137,778.45) ($10,340,534.02)

(1,028,376.00)$ (1,064,369.16)$ (1,468,829.44)$ (1,520,238.47)$ (1,573,446.82)$

$11,417,695.58 $13,132,491.72 $14,929,953.35 $16,763,300.08 $17,257,737.80

(4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$

$7,417,695.58 $9,132,491.72 $10,929,953.35 $12,763,300.08 $13,257,737.80

($2,967,078.23) ($3,652,996.69) ($4,371,981.34) ($5,105,320.03) ($5,303,095.12)$4,450,617.35 $5,479,495.03 $6,557,972.01 $7,657,980.05 $7,954,642.68

($1,364,357.47) ($1,411,794.39) ($1,461,666.49) ($1,514,161.40) ($391,392.22)

4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

7,086,259.88$ 8,067,700.65$ 9,096,305.52$ 10,143,818.65$ 11,563,250.46$

(38,248,159.98)$ (30,180,459.33)$ (21,084,153.81)$ (10,940,335.16)$ 622,915.31$


53/63

8 9 10

80,000,000.00 80,000,000.00 80,000,000.00

85.00% 85.00% 85.00%

68,000,000.00 68,000,000.00 68,000,000.00

$2.00 $2.04 $2.08

2016 2017 2018

$135,919,390.49 $138,637,778.30 $141,410,533.86

($107,620,848.00) ($109,636,363.78) ($111,704,151.64)

$28,298,542.48 $29,001,414.52 $29,706,382.22

($10,547,344.70) ($10,758,291.60) ($10,973,457.43)

(1,628,517.46)$ (1,685,515.57)$ (1,744,508.61)$

$17,751,197.78 $18,243,122.92 $18,732,924.79

(4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$

$13,751,197.78 $14,243,122.92 $14,732,924.79

($5,500,479.11) ($5,697,249.17) ($5,893,169.92)$8,250,718.67 $8,545,873.75 $8,839,754.88

8,245.00$

($399,482.40) ($407,747.36)

4,000,000.00$ 4,000,000.00$ 4,000,000.00$

11,851,236.27$ 12,138,126.39$ 12,847,999.88$

12,474,151.58$ 24,612,277.96$ 37,460,277.84$


54/63

Year 0 1 2 3

Manager 4 4 6

Salary 160,000.00$ 165,600.00$ 171,396.00$

Total Cost 640,000.00$ 662,400.00$ 1,028,376.00$

HOURLY

Cost/Hour $20.00 20.70$ 21.42$

Hours 2,000.00 2,000.00 2,000.00

Cost/Worker $40,000.00 $41,400.00 $42,849.00

# of Workers 437 473 510

Total Cost $17,480,000.00 $19,582,200.00 $21,852,990.00

Material

Raw Material 0.94$ 0.95$ 0.96$

Units 48,000,000.00$ 52,000,000.00$ 56,000,000.00$

Total 45,120,000.00$ 49,368,800.00$ 53,698,064.00$


Total 6,170,000.00$ 6,355,100.00$ 6,545,753.00$

Depreciation




Total 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

Days Sales Out 47.555 47.555 47.555


Days Payable Out 37.464 37.464 37.464

NWC


Inventory 8,816,824.69$ 9,654,801.25$ 10,525,420.31$


NWC $12,693,481.79 $14,009,766.24 $15,374,123.72

Recover ($12,693,481.79) ($14,009,766.24)

Change in NWC $12,693,481.79 $1,316,284.45 $1,364,357.47


55/63

4 5 6 7 8

6 8 8 8 8

177,394.86$ 183,603.68$ 190,029.81$ 196,680.85$ 203,564.68$

1,064,369.16$ 1,468,829.44$ 1,520,238.47$ 1,573,446.82$ 1,628,517.46$

22.17$ 22.95$ 23.75$ 24.59$ 25.45$

2,000.00 2,000.00 2,000.00 2,000.00 2,000.00

$44,348.72 $45,900.92 $47,507.45 $49,170.21 $50,891.17

546 582 619 619 619

$24,214,398.39 $26,714,335.45 $29,407,112.93 $30,436,361.88 $31,501,634.55

0.97$ 0.98$ 0.99$ 1.00$ 1.01$

60,000,000.00$ 64,000,000.00$ 68,000,000.00$ 68,000,000.00$ 68,000,000.00$

58,108,976.40$ 62,602,737.24$ 67,180,562.40$ 67,852,368.03$ 68,530,891.71$

4,283,489.84$ 4,411,994.54$ 4,544,354.37$ 4,680,685.00$ 4,821,105.55$2,458,635.75$ 2,532,394.82$ 2,608,366.67$ 2,686,617.67$ 2,767,216.20$

6,742,125.59$ 6,944,389.36$ 7,152,721.04$ 7,367,302.67$ 7,588,321.75$

500,000.00$ 500,000.00$ 500,000.00$ 500,000.00$ 500,000.00$

2,000,000.00$ 2,000,000.00$ 2,000,000.00$ 2,000,000.00$ 2,000,000.00$

1,500,000.00$ 1,500,000.00$ 1,500,000.00$ 1,500,000.00$ 1,500,000.00$

4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

47.555 47.555 47.555 47.555 47.555

46.155 46.155 46.155 46.155 46.155

37.464 37.464 37.464 37.464 37.464

$14,635,711.24 $15,923,653.83 $17,257,259.84 $17,602,405.04 $17,954,453.14

11,418,858.56$ 12,341,434.28$ 13,300,289.20$ 13,545,887.99$ 13,797,791.91$

($9,268,651.70) ($10,017,503.52) ($10,795,803.05) ($10,995,154.82) ($11,199,624.45)

$16,785,918.10 $18,247,584.59 $19,761,745.99 $20,153,138.20 $20,552,620.60

($15,374,123.72) ($16,785,918.10) ($18,247,584.59) ($19,761,745.99) ($20,153,138.20)

$1,411,794.39 $1,461,666.49 $1,514,161.40 $391,392.22 $399,482.40


56/63

9 10

8 8

210,689.45$ 218,063.58$

1,685,515.57$ 1,744,508.61$

26.34$ 27.26$

2,000.00 2,000.00

$52,672.36 $54,515.89

619 619

$32,604,191.76 $33,745,338.47

1.02$ 1.03$

68,000,000.00$ 68,000,000.00$

69,216,200.62$ 69,908,362.63$

4,965,738.72$ 5,114,710.88$2,850,232.68$ 2,935,739.66$

7,815,971.40$ 8,050,450.54$

500,000.00$ 500,000.00$ -$

2,000,000.00$ 2,000,000.00$ 4,675.00$

1,500,000.00$ 1,500,000.00$ 3,570.00$

4,000,000.00$ 4,000,000.00$ 8,245.00$

47.555 47.555

46.155 46.155

37.464 37.464

$18,313,542.20 $18,679,813.05

14,056,196.00$ 14,321,301.76$

($11,409,370.24) ($11,624,555.75)

$20,960,367.97 $21,376,559.06

($20,552,620.60) ($20,960,367.97) ($21,376,559.06)

$407,747.36 ($20,960,367.97) ($21,376,559.06)


57/63

Exhibit 5








sga of sales 7.76%


58/63

Year 0 1 2

Max Cap 80,000,000.00 80,000,000.00


Units 48,000,000.00 52,000,000.00

Price $1.77 $1.81


Revenue $84,960,000.00 $93,880,800.00

COGS ($69,959,412.00) ($76,638,554.45)

Gross $15,000,588.00 $17,242,245.55

SG&A Expense ($6,592,896.00) ($7,285,150.08)


EBITDA $8,407,692.00 $9,957,095.47

Depr Expense (4,000,000.00)$ (4,000,000.00)$

EBIT 3,767,692.00$ $5,957,095.47

Taxes ($1,507,076.80) ($2,382,838.19)Net Income $2,260,615.20 $3,574,257.28

Cap Ex (45,000,000.00)$

NWC ($12,911,854.84) ($1,339,651.90)

Depreciation 4,000,000.00$ 4,000,000.00$

Free Cash Flow (45,000,000.00)$ (6,651,239.64)$ 6,234,605.39$

Cummulative (45,000,000.00)$ (51,651,239.64)$ (45,416,634.26)$

WACC 9.238%

NPV (0.000)$

IRR 9.238%

Payback 6.940

MIRR 9.238%


59/63

3 4 5 6 7

80,000,000.00 80,000,000.00 80,000,000.00 80,000,000.00 80,000,000.00

70.00% 75.00% 80.00% 85.00% 85.00%

56,000,000.00 60,000,000.00 64,000,000.00 68,000,000.00 68,000,000.00

$1.84 $1.88 $1.92 $1.95 $1.99

2011 2012 2013 2014 2015

$103,124,448.00 $112,700,289.60 $122,617,915.08 $132,887,165.47 $135,544,908.78

($83,583,775.46) ($90,713,148.90) ($98,079,216.70) ($105,741,378.81) ($107,727,049.41)

$19,540,672.54 $21,987,140.70 $24,538,698.38 $27,145,786.66 $27,817,859.38

($8,002,457.16) ($8,745,542.47) ($9,515,150.21) ($10,312,044.04) ($10,518,284.92)

(1,028,376.00)$ (1,064,369.16)$ (1,468,829.44)$ (1,520,238.47)$ (1,573,446.82)$

$11,538,215.38 $13,241,598.23 $15,023,548.17 $16,833,742.62 $17,299,574.45

(4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$

$7,538,215.38 $9,241,598.23 $11,023,548.17 $12,833,742.62 $13,299,574.45

($3,015,286.15) ($3,696,639.29) ($4,409,419.27) ($5,133,497.05) ($5,319,829.78)$4,522,929.23 $5,544,958.94 $6,614,128.90 $7,700,245.57 $7,979,744.67

($1,388,722.56) ($1,437,049.90) ($1,487,912.54) ($1,541,509.17) ($399,015.93)

4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

7,134,206.66$ 8,107,909.03$ 9,126,216.36$ 10,158,736.40$ 11,580,728.74$

(38,282,427.59)$ (30,174,518.56)$ (21,048,302.20)$ (10,889,565.80)$ 691,162.94$


60/63

8 9 10

80,000,000.00 80,000,000.00 80,000,000.00

85.00% 85.00% 85.00%

68,000,000.00 68,000,000.00 68,000,000.00

$2.03 $2.07 $2.12

2016 2017 2018

$138,255,806.96 $141,020,923.10 $143,841,341.56

($109,764,350.42) ($111,854,888.79) ($114,000,325.02)

$28,491,456.54 $29,166,034.31 $29,841,016.54

($10,728,650.62) ($10,943,223.63) ($11,162,088.11)

(1,628,517.46)$ (1,685,515.57)$ (1,744,508.61)$

$17,762,805.92 $18,222,810.68 $18,678,928.43

(4,000,000.00)$ (4,000,000.00)$ (4,000,000.00)$

$13,762,805.92 $14,222,810.68 $14,678,928.43

($5,505,122.37) ($5,689,124.27) ($5,871,571.37)$8,257,683.55 $8,533,686.41 $8,807,357.06

8,245.00$

($407,283.95) ($415,731.19)

4,000,000.00$ 4,000,000.00$ 4,000,000.00$

11,850,399.60$ 12,117,955.22$ 12,815,602.06$

12,541,562.55$ 24,659,517.77$ 37,475,119.83$


61/63

Year 0 1 2 3

Manager 4 4 6

Salary 160,000.00$ 165,600.00$ 171,396.00$

Total Cost 640,000.00$ 662,400.00$ 1,028,376.00$

HOURLY

Cost/Hour $21.36 22.11$ 22.88$

Hours 2,000.00 2,000.00 2,000.00

Cost/Worker $42,721.77 $44,217.03 $45,764.62

# of Workers 437 473 510

Total Cost $18,669,412.00 $20,914,654.45 $23,339,958.46

Material

Raw Material 0.94$ 0.95$ 0.96$

Units 48,000,000.00$ 52,000,000.00$ 56,000,000.00$

Total 45,120,000.00$ 49,368,800.00$ 53,698,064.00$


Total 6,170,000.00$ 6,355,100.00$ 6,545,753.00$

Depreciation




Total 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

Days Sales Out 47.555 47.555 47.555


Days Payable Out 37.464 37.464 37.464

NWC


Inventory 8,969,316.14$ 9,825,631.80$ 10,716,060.71$


NWC $12,911,854.84 $14,251,506.74 $15,640,229.30

Recover ($12,911,854.84) ($14,251,506.74)

Change in NWC $12,911,854.84 $1,339,651.90 $1,388,722.56


62/63

4 5 6 7 8

6 8 8 8 8

177,394.86$ 183,603.68$ 190,029.81$ 196,680.85$ 203,564.68$

1,064,369.16$ 1,468,829.44$ 1,520,238.47$ 1,573,446.82$ 1,628,517.46$

23.68$ 24.51$ 25.37$ 26.26$ 27.18$

2,000.00 2,000.00 2,000.00 2,000.00 2,000.00

$47,366.39 $49,024.21 $50,740.06 $52,515.96 $54,354.02

546 582 619 619 619

$25,862,046.91 $28,532,090.10 $31,408,095.37 $32,507,378.71 $33,645,136.97

0.97$ 0.98$ 0.99$ 1.00$ 1.01$

60,000,000.00$ 64,000,000.00$ 68,000,000.00$ 68,000,000.00$ 68,000,000.00$

58,108,976.40$ 62,602,737.24$ 67,180,562.40$ 67,852,368.03$ 68,530,891.71$

4,283,489.84$ 4,411,994.54$ 4,544,354.37$ 4,680,685.00$ 4,821,105.55$2,458,635.75$ 2,532,394.82$ 2,608,366.67$ 2,686,617.67$ 2,767,216.20$

6,742,125.59$ 6,944,389.36$ 7,152,721.04$ 7,367,302.67$ 7,588,321.75$

500,000.00$ 500,000.00$ 500,000.00$ 500,000.00$ 500,000.00$

2,000,000.00$ 2,000,000.00$ 2,000,000.00$ 2,000,000.00$ 2,000,000.00$

1,500,000.00$ 1,500,000.00$ 1,500,000.00$ 1,500,000.00$ 1,500,000.00$

4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$

47.555 47.555 47.555 47.555 47.555

46.155 46.155 46.155 46.155 46.155

37.464 37.464 37.464 37.464 37.464

$14,887,295.04 $16,197,377.01 $17,553,907.33 $17,904,985.48 $18,263,085.19

11,630,099.33$ 12,574,483.93$ 13,556,830.01$ 13,811,407.72$ 14,072,604.84$

($9,440,115.17) ($10,206,669.19) ($11,004,036.43) ($11,210,676.36) ($11,422,689.24)

$17,077,279.20 $18,565,191.74 $20,106,700.92 $20,505,716.84 $20,913,000.79

($15,640,229.30) ($17,077,279.20) ($18,565,191.74) ($20,106,700.92) ($20,505,716.84)

$1,437,049.90 $1,487,912.54 $1,541,509.17 $399,015.93 $407,283.95


63/63

9 10

8 8

210,689.45$ 218,063.58$

1,685,515.57$ 1,744,508.61$

28.13$ 29.11$

2,000.00 2,000.00

$56,256.41 $58,225.38

619 619

$34,822,716.76 $36,041,511.85

1.02$ 1.03$

68,000,000.00$ 68,000,000.00$

69,216,200.62$ 69,908,362.63$

4,965,738.72$ 5,114,710.88$2,850,232.68$ 2,935,739.66$

7,815,971.40$ 8,050,450.54$

500,000.00$ 500,000.00$ -$

2,000,000.00$ 2,000,000.00$ 4,675.00$

1,500,000.00$ 1,500,000.00$ 3,570.00$

4,000,000.00$ 4,000,000.00$ 8,245.00$

47.555 47.555

46.155 46.155

37.464 37.464

$18,628,346.89 $19,000,913.83

14,340,627.39$ 14,615,688.24$

($11,640,242.30) ($11,863,508.34)

$21,328,731.98 $21,753,093.74

($20,913,000.79) ($21,328,731.98) ($21,753,093.74)

$415 731 19 ($21 328 731 98) ($21 753 093 74)

fin 302 case study

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