Total material

cost Total labour cost

Continuing the Michael Shaps' label and distribution
through 3-tier system
226800 831600

Continuing the Michael Shaps' label and distribution

direct to retail using sales representative*
226800 831600

Starting the custom crush label packaged in bottles^ 111600 409200

48000 211200

111600 409200
Starting the custom crush label packaged in boxes^

48000 211200

*Assuming that only additional capacity can be sold direct to retail

^The extra capacity is being used to continue the production of existing Michael Shaps' label and distributed throug
 Total packaging Total production No. of cases Sales representative Total cost
cost cost sold Fixed cost Commission incurred

453600 1512000 15750 0 0 1512000

453600 1512000 15750 120000 73710 1705710

223200 744000 7750 0 0 744000

230400 489600 8000 120000 83244 717844

223200 744000 7750 0 0 744000

6000 265200 8000 120000 83244 493444

hael Shaps' label and distributed through the three tier system
Selling Price of Revenue Production costs
each case earned Profits earned Materials

Michael Shaps' existing

124.8 1965600 453600 product lines 14.4

Michael Shaps' custom

187.2 2948400 1242690 crush label using boxes* 6

Michael Shaps' custom

124.8 967200 crush label using bottles 6

87.21 697680 203036

124.8 967200 *Includes an additional one-time

set up cost of $17,000 which has
been accounted in the NPV
87.21 697680 427436 calculations
Production costs per case
Labor Packaging Total

52.8 28.8 96

26.4 0.75 33.15

26.4 28.8 61.2

Year Cases sold
2004 231056
2005 241102
2006 20220
2007 371833
2008 383529
2009 396727
2010 445663 CAGR 0.115702
2011 497227
2012 554757
2013 618944
2014 690557
2015 770456
 Year 1 profits Year 2 profits

Continuing the Michael Shaps' label and distribution

through 3-tier system $ 453,600 $ 453,600

Continuing the Michael Shaps' label and distribution

direct to retail using sales representative $ 1,242,690 $ 1,242,690

Starting the custom crush label packaged in bottles $ 203,036 $ 201,215

Starting the custom crush label packaged in boxes $ 410,436 $ 718,835

Year 3 profits Year 4 profits Year 5 profits NPV

$ 453,600 $ 453,600 $ 453,600 $ 1,719,501

$ 1,242,690 $ 1,242,690 $ 1,242,690 $ 4,710,773

$ 199,394 $ 197,573 $ 195,980 $ 757,312

$ 1,010,234 $ 1,301,633 $ 1,556,607 $ 3,581,769