Exhibit 1 Zoe Hannah's Analysis of Store Hours MEMORANDUM TO: Kevin Blake, General Manager, Downtown Barrel, Inc. FROM: Zoe Hannah, Operations Manager RE: Extending store hours of operation for Downtown Barrel DATE: November 12, 2017 Cc: Tami Wong l have now completed a study of the economics of extending the store closing hours for Downtown Barrel. On the basis of my analysis, 1 recommend that we extend store hours to the statutory limit of 4:00 am. each morning. This will result in an increased annual profit of more than $68,000 before taxes. Even after the initial investment of $28,000 to upgrade security, we will still have increased prot. I have reached this conclusion based on the following information and analysis. . When we kept the store open until 4:00 am. on an experimental basis, we discovered the store got an average of five customers per hour even during the last hour of business, from 3:00 to 4:00 am. The number of customers was at least as large during each previous hour. [Attachment 2 summarizes the results of our experimentation with hours of operation.) . Tami's sampte of invoices shows that, on average, a typical customer makes purchases of about $37. (Note: all dollar gures in this memo are approximate.) From my experience running the store, I can say that this number is consistent with overall hours of operation (Le. a day customer's buying decisions are not substantially dierent from an evening customer's buying decisions). 0 Out of the $37, about $26 goes toward our purchase oi the alcohol, which leaves us with a contribution margin of$11.00 per customer. This gure does not include the cost of keeping the store open for an additional hour. Therefore, the contribution margin of the additional units sold during the 3:00 to 4:00 am. period is $11.00 x 5 customers = $55.00. By keeping the store open for the additional hour from 3:00 to 4:00 am, we would increase our revenues by $55.00. We must compare this to the added cost of keeping the store open one more hour. The overhead cost of the additional hour is almost nothing (since the refrigerators must be kept running overnight anyway). so the only substantial cost added is the wage of the clerks. By Gould state law, we must pay workers time-and-a-half, so our $15thour clerks must be paid $22.50 each. The added cost of $45 is less than the added revenue of $55.00, and, therefore, staying open until the last hour would increase our prots. The same is true for all previous hours as well. (These calculations are summarized in Attachment 3.) Comparing current prots with expected prots under my proposal, we will experience a prot increase of $189 per day, or $68,040 per year, before taxes. These gures are approximate, of course, because there are seasonal changes in alcohol purchases, and my estimates are based on experimentation during the last six months only. This may seem an unusual approach for maximizing our prot, but I'm pretty sure its correct. In my economics classes at Gould State, | teamed that prot increases whenever marginal revenue exceeds marginal cost. The marginal revenue is the additional revenue from doing one more of something (in this case, one more hour of business), and the marginal cost is the additional cost from doing one more of something (again, one more hour of business)