Fill in the required data for the income statement using the following information:

KEY DATA FOR OPTION 1 - ONLINE: Investment required (remember to depreciate existing long-term assets at the 2008 amount and ignore the half year rule for 2009 new depreciation i.e. apply a full year value for depreciation). $600,000 software, expected life 3 years, zero residual value. $1,500,000 warehousing, expected life 10 years $500,000 residual value. 30% additional inventory versus 2008 year-end amount, for the foreseeable future. Sales will increase by 30% versus 2008 and total gross margin in 2009 will be 50% (note this will include deferred revenues from prior year and deferred revenue in 2009 will be equal to 2008). A/R and A/P will not change vs 2008 (online = immediate payments both ways). SG&A Expenses will increase by 10% versus 2008 in 2009.

KEY DATA FOR OPTION 2 - BOUTIQUE: Investment required (remember to depreciate existing long-term assets at the 2008 amount and ignore the half year rule for 2009 new depreciation i.e. apply a full year value for depreciation). $5,000,000 for new stores, expected life 10 years, $1,000,000 residual value. 100% additional inventory versus 2008 year-end amount, for the foreseeable future. Sales will double versus 2008 and total gross margin in 2009 will remain at 30% (note this will include deferred revenues from prior year and deferred revenue in 2009 will be equal to 2008). A/R and A/P double vs 2008 (double sales and same business model). SG&A Expenses will increase by 50% versus 2008 in 2009

Online Option1 Boutique Option2 Dec-09 Dec-09 INCOME STATEMENT Fiscal year end Cdn$ Thousands Sales Cost og Goods Sold Gross profit Dec-05 11,664 7,619 4,046 Dec-06 11,577 7,791 3,786 Dec-07 10,916 7,456 3,459 Dec-08 10,507 7,387 3,121 0 Operating expenses Selling, general and administration Interest expense Depreciation expense Other operating expenses Total operating expenses Operating income Other income (expense) Income before taxes Provision for income taxes Net income 2,834 312 124 459 3,729 317 71 2,719 270 125 491 3,605 181 64 245 47 199 2,597 227 76 544 3,444 16 77 93 18 75 2,449 185 76 522 3,232 (111) 60 (51) (10) (42) 522 522 (522) 60 (463) 555 (1,018) 522 522 (522) 60 (463) 175 (638) 387 74 314 Online Option1 Boutique Option2 Dec-09 Dec-09 INCOME STATEMENT Fiscal year end Cdn$ Thousands Sales Cost og Goods Sold Gross profit Dec-05 11,664 7,619 4,046 Dec-06 11,577 7,791 3,786 Dec-07 10,916 7,456 3,459 Dec-08 10,507 7,387 3,121 0 Operating expenses Selling, general and administration Interest expense Depreciation expense Other operating expenses Total operating expenses Operating income Other income (expense) Income before taxes Provision for income taxes Net income 2,834 312 124 459 3,729 317 71 2,719 270 125 491 3,605 181 64 245 47 199 2,597 227 76 544 3,444 16 77 93 18 75 2,449 185 76 522 3,232 (111) 60 (51) (10) (42) 522 522 (522) 60 (463) 555 (1,018) 522 522 (522) 60 (463) 175 (638) 387 74 314