Assumptions for Option 1 Broker Fees Wholesaler Distributor Margin Retailer Margin Retail Price One Time Slotting Fee Free Case ? Trade Promotions every Northeast, Midwest, Southeast West National Average Manufacturing Cost Number of SKU Regions Predicted Growth Marketing Support SG&A Uplift Incremental Sales # Chains # Chains Calculations for Option 1 Retail Price Retail Margin Retail Purchase Price Distributor Margin Distributor Purchase Price Manufacturer Sales Price Manufacturing Cost Per Unit Contribution per Unit Sold Manufacturer Gross Margin Supermarket Channel - 8oz 4% of manufacturer's sales 15% 27% $0.74 per 8oz cup $10,000 per SKU per Retail Chain per SKU per Retail Chain 3 months $7,500 per ad per retailer $15,000 per ad per retailer $8,000 per ad per retailer $0.31 per 8oz cup 6 Eastern and Western Regions 20% per annum - after first year $1,200,000 per region per year $3,200,000 per annum 35,000,000 additional units 11 in Northeast 9 in West $0.74 27% $0.54 15% $0.46 $0.46 $0.31 $0.15 32.5% Reference Case Text - Supermarket Channel Case Text - Supermarket Channel Case Text - Supermarket Channel Exhibit 3 Case Text - Supermarket Channel Case Text - Supermarket Channel Case Text - Supermarket Channel Case Text Supermarket Channel Case Text Supermarket Channel From Exhibit 3 From Exhibit 6 From Exhibit 6 Option 1 Comment 4 Option 1 Option 1 Option 1 Option 1 Option 1 $'000 Incremental Sales (million units) Incremental Sales Less Manufacturing Costs Incremental Gross Margin Less Broker Fees Less Slotting Fees Trade Promotions Marketing Support Incremental SG&A Incremental Profit 2 Year NPV 5 Year NPV Year 1 2 3 4 10.0% Discount Rate $0.00 Million 10.0% Discount Rate $0.00 Million 5 Total 4 times p.a, national average, #retailers