Conquistador

Gray Team III

Market Research Data

Report
A National/Oregon per capita beer consumption C Market Share Estimates
E Beer Taxes Paid F Financial Statement Summaries G Consumer Study I Retail Wholesale

Selection Criteria
Allows for estimation of average per year per capita growth rate to apply to revenues
Allowed for estimation of market share that could be captured Provides data to extrapolate gallons sold and establish market size Cost of sales required for projections Insight into levels of leverage for other wholesalers Provided insight into product and feasibility of projected numbers; pricing guidance Determine price per six pack

Cost
$ 600

$ 1,200 $ 2,400 $ 100

$ 6,600 $ 3,600 $14,500

We purchased data that allowed us to estimate projected revenues and costs (based on market share and pricing) for ConquistadOregon. We calculated the NPV for Larrys salary as well as the company net worth at year 10.

Investment Decision
The projected revenues were based on: Initial six-pack sales for target market: 567,372 Growth rate of consumption: 1.62% Initial market share of Conquistador: 15.4% Costs include: Semi-fixed costs Costs of staffing (including Larrys salary) Initial capital expenditures

GRAPH HERE

Model Assumptions Larrys trust fund is a perpetuity that is not subject to fluctuation Conquistador will attain its projected 30% market share Conquistadors premium pricing is sustainable in target market Growth rate of consumption is consistent Statewide consumption patterns hold in target counties Continued access to financing No additional CapEx required in 10 years Federal income taxes negligible given projected initial losses

Our models indicate that the company will have losses through year 6, and become increasingly profitable thereafter, with a net income of $459,348 in year 10. If Larry is comfortable with the long payback period and the high likelihood of start-up failure, he should make a bid.

In a perfect world
With more time and money, the team would undertake additional research into the market, the product, and Larrys risk tolerance.

Additional Product Research Taste product Buy retailer study

Additional Market Research Look at longer time horizon for data Purchase beer & liquor license data to determine keg sales

Additional Larry Research What alternative investments can Larry make? What has he rejected in the past?