GOLF COURSE INDUSTRY BENCHMARK DATA REVENUE$ BY SIZE OF COURSE(2017)

	Bottomquartile (25%)	Lowermiddle (25%)	Upper middle (25%)	Top quartile (25%)
Revenuerange:
LowValue($000)	$ 30	$ 266	$ 586	$ 1,240
HighValue($000)	$ 266	$ 586	$ 1,240	$ 5,000
Revenuesandexpenses	%ofrevenues
Totalrevenue	100.00	100.00	100.00	100.00
Salesofgoodsandservices	84.10	86.40	90.30	81.50
All otherrevenues	15.90	13.60	9.70	18.50
Costofsales(directexpenses)	17.60	22.20	25.10	26.20
Operatingexpenses(indirectexpenses)	90.80	80.90	77.20	73.90
Totalexpenses	108.30	103.10	102.40	100.10
Netprofit/loss	-8.30	-3.10	-2.40	-0.10
Financialratios
Currentratio(x)	0.60	0.60	0.70	0.40
Debttoequityratio(x)	4.10	3.40	2.70	2.20
Interest coverageratio(x)	-1.30	0.30	0.10	0.90
Grossmargin(%)	79.10	74.30	72.20	67.80
Returnontotal assets (%)	-1.90	0.60	0.20	1.10

EXHIBIT 2: STONE ROCK GOLF & COUNTRY CLUB INCOME STATEMENTS(YEARENDED OCTOBER31)

	2014		2015		2016
	Actual	%ofSales		Actual	%ofSales		Forecast	%ofSales
REVENUE
Memberships	$ 152,957	14.2%		$ 186,752	14.2%		$ 200,000	14.2%
ProShop	63,093	5.9%		86,915	6.6%		85,000	6.0%
GreenFees/GolfTourneys	298,565	27.8%		283,744	21.6%		310,000	22.0%
ClubStorage	1,700	0.2%		1,522	0.1%		1,600	0.1%
DrivingRange	7,956	0.7%		9,611	0.7%		10,000	0.7%
CartRental	97,590	9.1%		90,168	6.9%		95,000	6.7%
Bar/Kitchen/BanquetSales	418,585	38.9%
Bar Sales				322,521	24.6%		355,000	25.2%
KitchenSales				66,892	5.1%		70,000	5.0%
Wedding&EventSales				191,628	14.6%		230,000	16.3%
MiscellaneousSales				24,394	1.9%
HallRental	30,694	2.9%		42,798	3.3%		50,000	3.5%
SignSponsorship	4,500	0.4%		4,750	0.4%		4,750	0.3%
	1,075,640	100.00%		1,311,695	100.00%		1,411,350	100.00%
CostofSales	244,962	22.77%		331,236	25.25%		352,838	25.00%
GrossProfit	830,678	77.23%		980,459	74.75%		1,058,513	75.00%
EXPENSES
Advertising/Promotion	58,861	5.47%		48,960	3.73%		45,000	3.19%
Amortization	99,037	9.21%		99,027	7.55%		110,000	7.79%
Bad Debts	2,503	0.23%		684	0.05%		500	0.04%
Equipment Leases	9,071	0.84%		7,016	0.53%		-	0.00%
Insurance	12,512	1.16%		13,643	1.04%		14,000	0.99%
BankCharges/Interest	33,352	3.10%		44,134	3.36%		42,000	1.60%
ManagementFees	18,184	1.69%		18,368	1.40%		33,993	2.41%
MeetingsandConventions	2,049	0.19%		249	0.02%		5,000	0.35%
Memberships/Licenses	5,955	0.55%		7,579	0.58%		8,500	0.60%
Office	10,913	1.01%		12,090	0.92%		12,500	0.89%
ProfessionalFees	7,093	0.66%		10,754	0.82%		10,500	0.74%
PropertyTaxes	30,430	2.83%		28,779	2.19%		29,642	2.10%
Repairs&Maintenance	115,515	10.74%		105,520	8.04%		110,000	7.79%
Salaries&Wages	421,390	39.18%		473,157	36.07%		500,000	32.50%
Supplies	29,027	2.70%		20,027	1.53%		25,000	1.77%
Utilities	44,011	4.09%		47,851	3.65%		49,000	3.47%
VehicleExpense	2,068	0.19%		3,538	0.27%		5,000	0.35%
	901,971	83.85%		941,376	71.77%		1,000,635	70.90%
EBT	(71,293)	-6.63%		39,083	2.98%		57,877	4.10%
Taxes	(11,300)	-1.05%		6,045	0.46%		7,250	0.51%
NETINCOME	$ (59,993)	-5.58%		$ 33,038	2.52%		$ 50,627	3.59%

Note:EBT=earningsbefore tax.Source:Company files.

EXHIBIT3:STONEROCKGOLF&COUNTRYCLUBBALANCE SHEET(ASATOCTOBER31)

	2014		2015		2016
	Actual		Actual		Forecast
Assets
Current
Accountsreceivable	$ 24,077		$ 32,116		$ 26,362
Inventory	40,934		40,147		41,727
Prepaidexpenses	11,717		14,892		16,102
	76,728		87,155		84,191
Property,plantandequipment	802,407		728,446		786,386
Futureincometaxes	8,100		7,900		4,900
	$ 887,235		$ 823,501		$ 875,477
LiabilitiesandShareholders'Equity
Current
Bankindebtedness	$ 160,413		$ 139,940		$ 118,735
Accountspayable	43,234		60,319		84,037
Employeedeductionspayable	7,805		7,995		7,695
Incometaxespayable			5,845		8,051
Salestaxpayable	13,550		2,355		1,422
Deferredincome	6,710		4,116		8,002
Currentportionoflongtermdebt	85,612		58,505		70,357
	317,324		279,075		298,299
Longtermdebt	177,586		119,063		101,188
	494,910		398,138		399,487
Shareholders'Equity
Sharecapital	15,041		15,041		15,041
Retainedearnings	377,284		410,322		460,949
	392,325		425,363		475,990
	$ 887,235		$ 823,501		$ 875,477

EXHIBIT4:LAYOUTOFTHEHIDEAWAY

ProposedBuildingLayout:

EXHIBIT5:ESTIMATEDPROJECTCOSTS

NewWedding&EventSpace	Cost$	ParkingLot	Cost$
Demolition	$ 10,000	SiteWork	$ 120,000
AlterationstoExistingStructure	75,000	Electrical	15,000
InteriorRenovations	75,000	Concrete	12,600
Mechanical	75,000	General	9,700
Electrical	95,000		$ 157,300
GeneralConditions	40,000
ExteriorRenovations	75,000	ProfessionalFees
	$ 445,000	Contractor	$ 65,000
		Architect	24,000
		EngineeringDesign& SitePlan	25,000
Maintenance/CartStorageFacility		Mechanical&ElectricalEngineering	10,000
Labour	$ 20,000		$ 124,000
Material	82,500
Equipment	1,000	Total	$ 995,350
Subtrades	165,000
Other	550	KitchenEquipment	$ 100,000
	$ 269,050

Note: Professional fees were tax deductible when paid. Kitchen equipment had a capital cost allowance (CCA) rate of 50 percent and a useful life of 10 years. Remaining investments had a CCA rate of 30 per cent and a useful life of 25 years. Also,thoughitwasunlikelythatthekitchenequipmentwouldhaveanyvalueattheendofitsusefullife,Robertsestimated thattheotherinvestmentswouldincreasetheoverallvalueoftheclubbyafactorofthreetimestheafter-taxnetcashflowsattheendof year 10. However, he doubted that the "maintenance only" project would have any residual value at the end of 10 years.Thecorporatetaxrateaveraged15percent.

Source:Companyfiles.

EXHIBIT6:MEMOFROMANNE KELLY RECOSTING

To: Jordan Roberts, General ManagerFrom:AnneKelly,DirectorofSpecialEventsRe: TheHideawayProjectedCosts

HiJordan.I'vespokenwithmyteamandhere'swhatwe'rethinking.

Based on our current weddings held in the Ballroom, we're comfortable with my original estimate that 65percentofallfunctionswillbesit-downmealsandtheremainingcocktailfunctions.Iknowwe'veestimatedour capacity as 210 and 250, respectively, for these two types of events, and I certainly see our eventsalmost always at capacity in the Ballroom currently. I think we're okay estimating full capacity. By the way,we've included some projected revenues for other events. Just a reminder that these events typically arerentalincome onlythatis,wedon'tprovide anyfoodoralcohol atthose events.

As you know, it's much more expensive to serve a full meal. I've checked with the chef and, based on ourcurrent offerings, I think we can estimate using our current full meal cost of $25 per person. Cocktails andappetizers are, of course, less expensive, and I think we're safe to say $8.00 there per person. I wouldassumearateofincreaseof2percentonthesecostssimilartoourexpectedpricingincreases.Andjusta reminder that we shouldn't have to factor in alcohol as we permit our clients to bring in their own wine,beer,and spirits.

Based on how we currently staff the Ballroom events, I estimate that we'll need 14 serving staff membersper event. I typically have the staff here for set-up through to tear-down, which usually means a 12-hourshift. Current hourly rates are, on average, $16.50, but we should count on a 2 per cent increase on thisrate.Plus,IknowtheOntariogovernmenthasbeentalkingaboutincreasingminimumhourlyrates.I'm notsurehowthatwillimpactallofthebusinesshere atSRGCC.

I'm assuming we'll see increases in our insurance and utilities bills with this expansion. Without heat, we'lljust be paying for power, and so I'm guessing that the utility bill increase will be fairly minor, say $15,000.InsuranceIaskedourbroker.She'ssuggestedwethinkabout$25,000(total)asalikelyincreaseforbothpropertyandliabilitycoverage.Both ofthese willlikelyincreaseata2 percentrateaswell.

I'm also thinking that we'll need to increase our supplies of linens, ceremony chairs, etc. in order to haveenough inventory on hand for the extra functions. I think we should count on spending $10,000 on thesesortsofsupplies.

Finally, between myself and our manager of weddings and events, we think we can manage the extraworkload, though I believe the Hideaway will take up 40 per cent of our manager's time. Her current totalcompensationis$65,000,asyou know.

Can you please provide the answer of following:

Determine the impact of both the increased debt and returns on the project of SRGCC