Question: Design Your Own Doll Current year end 31 Dec 10 Year counter 1 2 3 4 5 6 7 8 9 10 Year 2010 2011

Design Your Own Doll Current year end 31 Dec 10 Year counter 1 2 3 4 5 6 7 8 9 10 Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Operating projections (given) Revenue -- 6,000 14,360 20,222 21,435 22,721 24,084 25,529 27,061 28,685 Revenue Growth ###### ###### 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% Production Costs: Fixed Production Expense (excl. depreciation) (1,650) (1,683) (1,717) (1,751) (1,786) (1,822) (1,858) (1,895) (1,933) Variable Production Costs (2,250) (7,651) (11,427) (12,182) (12,983) (13,833) (14,736) (15,694) (16,712) Depreciation (310 ) (310) (310) (436) (462) (490) (520) (551) (584) Total Production Costs (4,210) (9,644) (13,454) (14,369) (15,231) (16,145) (17,113) (18,140) (19,229) Selling, General & Administrative (1,201) (1,240) (2,922) (4,044) (4,287) (4,544) (4,817) (5,106) (5,412) (5,737) Total Operating Expenses (1,201) (5,450) (12,566) (17,498) (18,656) (19,775) (20,962) (22,219) (23,553) (24,966) Operating Profit (1,201) 550 1,794 2,724 2,779 2,946 3,123 3,310 3,509 3,719 Working Capital Assumptions: Minimum Cash Balance as % of Sales 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Days Sales Outstanding 59.2x 59.2x 59.2x 59.2X 59.2X 59.2X 59.2X 59.2X 59.2x Inventory Turnover (based on total production costs) 12.2x 12.3x 12.6x 12.7x 12.7x 12.7x 12.7x 12.7x 12.7x Days Payable Outstanding (based on total cash op. exp.) 33.7x 33.8x 33.9x 33.9x 33.9x 33.9x 33.9x 33.9x 33.9x Capital Expenditures 4,610 310 310 2, 192 826 875 928 983 1,043 1,105 Assumptions Tax rate 40.00% Perpetuity growth rate 3.00% Discount rate 9.00% Investment in working capital (1,000) Application development personnel costs (435) Working capital Cash Receivables Inventory Payables Total working capital 1,000 Change in working capital

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