Develop forecasted Profit and Loss pro-forma statements for Clean Edge under Niche and Mainstream Scenarios for the first two years. Use Exhibit A in the next page as a guide.

Exhibit 7 Financial Forecasts: Alternative Positioning Scenarios for Clean Edge Niche Positioning Mainstream Positioning 3.3 4.0 9.9 21.9 Year 1 Year 2 1.0 Planned capacity Razor unit volume (millions of units) Planned capacity Cartridge unit volume (millions of units) Capacity costs (S in millions) Year 1 Year 2 4.0 10.0 Year 1 Year 2 $ 0.61 s 0.87 $ 1.71 $ 2.45 Razor: Production per unit cost Razor: Manufacturer price Razor: Suggested price Cartridge: Average Production unit cost Cartridge Average Manufacturer price Cartridge: Average Suggested price $ 5.00 $ 9.09 s 12.99 $ 2.43 $ 7.35 s 10.50 $ 4.74 s 7.83 11.19 $ 2.24 $ 6.22 $ 8.89 Year 1 Advertising (S in millions) Consumer promotions (S in millions) Trade promotions (S in millions) Year 2 Year 1 Year 2 Year 1 $ 19 $ 17 $ 17 $ 14 6 Year2 a Cartridge unit assumes average 4-count refill package Exhibit A. Profit and Loss Forecasts for Clean Edge Under Niche and Mainstream Scenarios (S in Millions) Niche Mainstream Year 1 Year 2 Year 1 Year 2 1 Unit sales Razors 2 Dollar sales-Razors 3 Unit sales- Cartridges 4 Dollar sales- Cartridges 5 Total dollar sales 6 Production costs Razors 7 Production costs Cartridges 8 Capacity costs 9 Advertising and Promotion 10 Total costs 11 Operating Profit 12 Profits as % ofsales 13 Cost ofcannibalization-Razors 14 Cost ofcannibalization-Cartridges 15 Profit after cannibalivation (a) Cannibalaton cost .1% cambalaton from Avail and Pro * unt sales . contribution per unit