Question: 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.

3.3 Exhibit7 Financial Forecasts: Alternative Positioning Scenarios for Clean Edge Niche Positioning Mainstream Positioning Planned capacity Razor unit volume (millions of units) Year 1 1.0 Year 2 1.5 4.0 Planned capacity Cartridge" unit volume (millions of units) Year 1 4.0 Year 2 10.0 21.9 Capacity costs ($ in millions) Year 1 $ 0.61 $ 1.71 Year 2 $ 0.87 $ 2.45 Razor: Production per unit cost $ 5.00 $ 4.74 Razor: Manufacturer price $ 9,09 $ 7.83 Razor: Suggested price $ 12.99 $11.19 Cartridge Average Production unit cost $ 2.43 $ 2.24 Cartridge: Average Manufacturer price $ 7.35 $ 6.22 Cartridge: Average Suggested price $ 10.50 $ 8.89 Advertising ($ in millions) Year 1 $ 7 $ 19 Year 2 $ $ 17 Consumer promotions ($in millions) Year 1 $ $ 17 Year 2 $ $ 14 Trade promotions (5 in millions) Year 1 $ 2 s 6 Year 2 $ $ Cartridge unit assumes average 4-count refill package. Exhibit A. Profit and Loss Forecasts for Clean Edge Under Niche und Mainstream Scenarios (5 in Millions) 6 6 8 - Niche Mainstream Year 1 Year! Year 2 Year 2 1 Unitsaks. Rapors 2 Dolkar saks - Ramos 3 Unidades - Cartridges 4 Dollarsakes - Cartridges Total doller sales 6 Production costs Ramos 7 Production costs Cartridges 8 Capacity costs 9 Advertising and Promotion 10 Total costs 11 Operating Profit 12 Profits as of sales 13 Cost of cannibaraton-Rasors 14 Cost of cannibalization Cartridges 15 Prots aller carbalation (a) Cannibalination cost -% cannibaliation from Avail and Pro *unt sales contribution per unit