This is the excel file to fill out for Module 6.

I started with all the exhibits BELOW and all of the break even calculations to the SIDE

TO DO THE ASSIGNMENT, GO TO CELL

Exhibit 1 Mountain Man 2005 Income Statement

Net Revenues Cost of Goods Sold Gross Margin Sales, General & Administrative Other Operating Expenses Operating Margin Other Income Net Income Before Taxes Provision for Income Taxes Net Income After Taxes

$50,440,000 $34,803,600 $15,636,400 $9,583,600 $1,412,320 $4,640,480 $151,320 $4,791,800 $1,677,130 $3,114,670

100.00% 69.00% 31.00% 19.00% 2.80% 9.20% 0.30% 9.50% 3.30% 6.20%

Exhibit 3 Competitive Market Shares in Barrels by Brewer East Central Region

Anheuser-Busch Miller Coors Other 2nd tier Premium & Popular Brewers Craft / Specialty Brewers Imports Total

15,620,252 8,553,948 3,347,197 4,648,885 557,866 4,462,929 37,191,077

42.00% 23.00% 9.00% 12.50% 1.50% 12.00% 100%

Exhibit 4 Beer Consumption by State (2000 to 2005 Shipments in Barrels) STATE ILLINOIS INDIANA KENTUCKY MICHIGAN OHIO WEST VIRGINIA WISCONSIN EAST CENTRAL REGION TOTAL U.S. Source: Beer Institute

2000 9,038,323 3,954,209 2,517,894 6,761,561 8,493,144 1,274,626 4,741,019 36,780,776 197,609,645

2001

2002

2003 9,108,157 3,905,265 2,490,928 6,774,702 8,760,272 1,348,527 4,855,313 37,243,163 202,586,016

9,165,381 9,268,188 3,947,446 4,021,685 2,486,731 2,564,013 6,695,665 6,854,064 8,601,604 8,682,331 1,311,838 1,360,589 4,784,791 4,890,122 36,993,456 37,640,992 200,146,800 202,605,792

Exhibit 5 Consumption by Type of Beer (2005) Light Beer Premium Beer EAST CENTRAL REGION 18,744,303 7,326,642 % Total 6-year CAGR 50.40% 4% 19.70% -4%

Popular Imported Premium Superpremium (craft and high-end domestics) Total Barrels Source: Extrapolated from Beverage Marketing Corp. Data

4,351,356 4,462,929 2,305,847 37,191,077

11.70% 12.00% 6.20% 100.00%

-5% 6% 9%

Consumption by Origin / Packaging (2005) Imported Domestic - Packaged Domestic - Draught Total Barrels Source: Freedonia Analyst Report EAST CENTRAL REGION 4,462,929 29,618,974 3,109,174 37,191,077 % Total 12.00% 79.60% 8.40% 100.00%

Exhibit 5: Light Beer Market Shares and Dominant Brands Light Beer Competitive Market Shares East Central Region

2005 Market Share

Anheuser-Busch Miller Coors Other brands Total Light Beer

49% 24% 11% 14% 100%

Leading Domestic Light Beer Brands Brand Bud Light Miller Lite Coors Light

2005 Market Share 32.90% 17.80% 14.70%

Natural Light Busch Light Michelob Ultra Milwaukees Best Light Other domestic brands Total

9.80% 6.40% 5.60% 3.40% 9.40% 100%

Leading Imported Light Beer Brands Brand Corona Light Amstel Light Labatt Blue Light Other imported brands Total

2005 Market Share 57% 26% 15% 2% 100%

Case Facts Used in this Scenario Revenues from MM Beer in 2005 Contribution Margin Annual Change in MM Beer Revenues East Central Light Beer Market in 2005 Annual Change East Central Light Beer Market

# Barrels of MM Beer Variable Cost per Barrel MM Beer Increase in Cost of MM Light Beer (If launched)

Assumptions Used In this Scenario

Is MM Light Actually Launched? Loss of Contribution (only applies if MM Light Launched) Advertising Cost of MM Light (only applies if MM Light is Launched) Incremental Sales General & Administration Costs Initial Market Share for MM Light in East Central Light Beer Market Growth in Market Share for MM Light in East Central Light Beer Market Discount Rate Perpetuity Growth Rate for 'Net Change in Contribution'

Calculation of Contribution per Barrel of MM Light Sold

Revenue received in 2005

# Barrels of MM Beer

Revenue per Barrel of MM Beer

Variable Cost per Barrel MM Beer

Contribution per Barrel of MM Beer

Increase in Cost of MM Light Beer (If launched)

Contribution per Barrel of MM Light

Calculation of Break Even Volumes Required - First Year Breakeven

Current Revenues of MM Beer

Projected Revenues of MM Beer Next Year Projected Contribution from MM Beer Projected Loss of Sales from Introduction of MM Light Projected Loss of Contribution from Launch of MM Light # Barrels of MM Light Needed to recover Loss of Contribution Cost of Advertising MM Light Incremental SG&A cost # Barrels of MM Light Needed to recover new Advertising Costs + SG&A # Barrels of MM Light Needed to Break-Even in First Year

2004 9,032,851 3,993,643 2,591,949 6,746,578 8,702,382 1,373,205 4,877,662 37,318,269 204,318,220

2005 9,063,267 3,998,855 2,555,739 6,700,174 8,584,283 1,359,231 4,929,529 37,191,077 203,515,149

Which Represents

% Share of E.C. Beer Consumption from Premium & Popular Brewers % Share of E.C. Beer Consumption % Share of E.C. Light Beer Consumption % Share of 'Other Brand' E.C. Light Beer Consumption

Calculation of Break Even Volumes Required - Two Year Breakeven

Two Years of Lost Contribution (from One Year Breakeven Calculation)

Initial Advertising Costs (One Time only) Two Years of Incremental SG&A

Contribution per Barrel of MM Light # Barrels of MM Light Needed to Break-Even in Two Years

Which Represents

Average % Share of E.C. Beer Consumption from Premium & Popular Brewers Average % Share of E.C. Beer Consumption Average % Share of E.C. Light Beer Consumption Average % Share of 'Other Brand' E.C. Light Beer Consumption

More Advanced 2 and 5 Year NPV Calculations

Taking Assumption of Market Change from Assumption Section at top of Spreadsheet Year 2006 Revenues from MMBeer $49,431,200 Contribution from MMBeer $15,323,672 Loss of Contribution (depends on cannibalization assumption) ($766,183.60) Launch Advertising Cost of MM Light Incremental SG&A Total Incremental Costs associated with MM Light East Central Light Market: Assumed Market for Light Beer Market Share for MM Light Barrels Sold MM Light Contribution of MM Light (barrels sold * contribution per barrel) Net Change in Contribution (costs - contribution)
($750,000)

2007

$48,442,576 $15,017,199

($750,859.93)
$0

($900,000) ($2,416,184) $19,494,075 0.25% 48,735

($900,000) ($1,650,860) $20,273,838 0.50% 101,369

$1,236,899 ($1,179,285)

$2,572,750 $921,890

* Discount Factor Present Value

CALCULATE 2 Year NPV of Launch Effect

1.12 ($1,052,933)
($318,007) $7,074,633

1.25 $734,925

CALCULATE 5 Year NPV of Launch Effect

These values indicate that the Mountain Man Light brand of beer will not only be successful launch, but actually excell. The light beer market is growing, and it is in a position to boost the company's sales. The projections for the year two NPV and year 5 NPV show just how Mountain Man beer will be effected by the adding the new brand. Per these calculations, MMBC show launch Mountain Man Light.

Source $50,440,000 31.0% -2.0% 18,744,303 4.0% Exhibit 1 Exhibit 1 Case Fact Page 6 Exhibit 5 Exhibit 5

520,000 $66.93 $4.69

Case Fact Page 3 Case Fact Page 6 Case Fact Page 6

YES This value depends on amount of cannibalization 5.00% projected $750,000 Case Fact From Page 6 $900,000 Case Fact From Page 6 0.25% Case Fact From Page 6 0.25% Case Fact From Page 6 12.00% These 2 values depend on your assumptions; you do NOT need them for BreakEven 3.00%

$50,440,000
520,000 This was not provided, but calculated by dividing revenue by

$97.00 # barrels
$66.93

$30.07
$4.69

$25.38

$50,440,000 $49,431,200 $15,323,672

Assuming a -2.0% annual change

5.00%
$766,184 30,188 $750,000 $900,000 65,012 95,200

in MM Beer Sales Next Year Change this cell to 0 to assume no change in market size
NOTE: You may change this to any cannibalization prediction NOTE: your value may be off if you didn't lower projected revs

2.05% 0.26% 0.51% 3.63%

Using Data from Exhibit 3 Using Data from Exhibit 5 Using Data from Exhibit 5 Using Data from Exhibit 5

NOTE: this value will be off if

value in blue cell above is off

$1,517,044 $750,000 $1,800,000 Assuming MM Lager Market

continues to change at per annum

-2.0%

$25.38 160,246

or

80,123 per annum

1.72% 0.22% 0.43% 3.05%

Using Data from Exhibit 3 Using Data from Exhibit 5 Using Data from Exhibit 5 Using Data from Exhibit 5

2008

2009

2010

$47,473,724 $14,716,855

$46,524,250 $14,422,517

$45,593,765 $14,134,067

($735,842.73)
$0

($721,125.87)
$0

($706,703.36)
$0

($900,000) ($1,635,843) $21,084,792 0.75% 158,136

($900,000) ($1,621,126) $21,928,183 1.00% 219,282

($900,000) ($1,606,703) $22,805,311 1.25% 285,066

$4,013,490 $2,377,647

$5,565,373 $3,944,247

$7,234,985 $5,628,281

1.40 $1,692,362

1.57 $2,506,640

1.76 $3,193,638