2) The following is pro forma financial data for year one of the competing proposals (Kerry's Revenge vs. Banhill Station) as relates to BIUKE's trading area only. All data is in US dollars: 2020 Unit Sales (estimated) 2020 Selling Price/bottle 2020 Contribution Margin Selling Expenses Marketing Expenses (5,000 person-hours) Marketing Person-Hours (estimated) Kerry's Revenge Banhill Station 200,000 300,000 $9.50 $19.00 30% 35% $180,000 $350,000 $1,500,000 500 4,000 -0 The marketing expense will be allocated in proportion to the estimated number of marketing hours required to prepare and implement the launch. Please answer the following questions: a) Prepare a 2020 pro forma Income Statement (only until the EBIT line) for each product proposal. (10 marks) b) What is the break-even point (in unit sales) for each proposal? How much revenue is required to reach this break-even point? (8 marks) c) Assume that each project requires at least a $300,000 profit in Year 1. Calculate the Optimal Price Point (OPP) for each project, using the 2020 Unit Sales value from the table above. Do you think the company should change the price for each product to the optimal price that you calculated? Explain why or why not. (8 marks) d) What financial risks should be considered when looking at this financial data? Hint: remember that this is pro forma data for products that are launching in British and European markets. (6 marks) e) Based solely on your quantitative analysis and the information above, which proposal should the company launch? Support your answer with specific calculations. (8 marks) 2) The following is pro forma financial data for year one of the competing proposals (Kerry's Revenge vs. Banhill Station) as relates to BIUKE's trading area only. All data is in US dollars: 2020 Unit Sales (estimated) 2020 Selling Price/bottle 2020 Contribution Margin Selling Expenses Marketing Expenses (5,000 person-hours) Marketing Person-Hours (estimated) Kerry's Revenge Banhill Station 200,000 300,000 $9.50 $19.00 30% 35% $180,000 $350,000 $1,500,000 500 4,000 -0 The marketing expense will be allocated in proportion to the estimated number of marketing hours required to prepare and implement the launch. Please answer the following questions: a) Prepare a 2020 pro forma Income Statement (only until the EBIT line) for each product proposal. (10 marks) b) What is the break-even point (in unit sales) for each proposal? How much revenue is required to reach this break-even point? (8 marks) c) Assume that each project requires at least a $300,000 profit in Year 1. Calculate the Optimal Price Point (OPP) for each project, using the 2020 Unit Sales value from the table above. Do you think the company should change the price for each product to the optimal price that you calculated? Explain why or why not. (8 marks) d) What financial risks should be considered when looking at this financial data? Hint: remember that this is pro forma data for products that are launching in British and European markets. (6 marks) e) Based solely on your quantitative analysis and the information above, which proposal should the company launch? Support your answer with specific calculations. (8 marks)