A fictitious firm, GamesRight, is looking to improve their business and have asked you for some marketing help. The company has given you the following information for fiscal year ending May 31, 2021: GamesRight is the exclusive Canadian reseller of specialty board games targeted at helping active Senior Citizens keep their brains active. The target market is simply stated as seniors between the ages of 65 and 80 years old. There are 20 different games that the company re-sells including examples such as BrainTeaser, KeepitActive, UpandUp, YoungatHeart and BrainKing. The games sell at retail for $40 (retail selling price). The company releases new updated versions of each game every year. The COGS for each game is estimated at $15 (largely the fees paid to the reseller). Shipping is paid for by the customer. The company sells 100% through their ecommerce presence that they have setup through a competitor to Shopify. Assume for this company charges a set fee of 7% of total revenue (not including taxes) for all transactions for use of their platform. 100% of revenues come from Canada right now. At the beginning of the fiscal year (June 1, 2020), the CRM system counted more than 12,000 active customers in their database. Over the course of the year GamesRight added 2,300 new/first time customers and ended the year with 11,300 customers in their database. The difference is melt/churn due to seniors no longer being customers. Normally about 5% of customer base is no longer there due to death. On average over past few years each new customer buys an average of 1 board game in the first year and ongoing active customers buy an average of 2 games per year each year thereafter. GamesRight spends $150,000 per year on acquiring new customers. All of this goes to cover salaries, benefits, and expenses (including marketing campaigns) associated with the marketing and sales organization. The total OPEX (largely overhead and including $150,000 for new customer acquisition) is $350,000 GamesRight can borrow money from the bank at a rate of prime+ 2%. This is the discount rate. Assume prime is 3% for this example. The CEO of GamesRight, Terry Millerano has asked you to advise her on how you can help her grow profitability next year by 150%. Please answer the following questions below:

a) If GamesRight operates the same way in June 1, 2021 to May 31, 2022 (spends the same, achieves the same # of new customers, same spend, same % total melt) as did in prior year will it achieve the EBITDA target of a 50% increase from prior year? Show work and explain. (3 points)