I'm having a hard time figuring out how they got the numbers from Table 1(Case Part 2) in Case Part 1? Exhibit 9 & 10 is also attached that they reference in the paper.

Industry consolidation: How attractive are the economics of owning an independent ultra premium winery on a 100 acre vineyard in Napa Valley? What advantagesfdisadvantages does Robert Mondavi have relative to small independent wine yards? It is not very attractive since the price of the property is much higher in comparison to other locations. In Napa Valley, the price per acre reached up to $100,000 while along California's coast the price only reached $20,000 (Robeito, 2005, p3). By using the data in Exhibit 9 and Exhibit 10, it is possible to calculate the upfront expenses and the revenue (Roberto, 2005, Exhibit 9). The total up'ont expenses of the ultra-premium winery, including costs of vines and land acquisition, can be calculated to be $1 7.1 million. The total revenue can be calculated by multiplying the number of bottles by the price per bottle, and it equals to $4.5 million per year. To calculate the retum rate per year, the total cash ow per year is needed. The ratio of EBIT to the winery price is calculated to be 23% and therefore the total cash ow per year is $1.035 million. Comparing this to the initial $17.1 million investment, the retuin rate is below 10%. The calculations do not take accolmt of the investments in working capital. Concludingly, the economics of owning an independent ultra-premilnn winery on a IOUacre vineyard in Napa Valley is not very attractive due to a high initial investment and a low retuln rate of below 10% (Table 1}. Mondavi has the advantage in scale and capital. Capital investments and innovation allowed the company to increase the quality of produced wine while decreasing the operating costs. In comparison to the smaller wineries, one of the main advantages of the company is in the competition for grape sources. The New World has developed grape markets, and Mondavi's company can outbid smaller wineries due to its high capital (Robeito, 2005, p.2). The small wineries, however, are able to consistently produce high-quality wine in a limited quantity, which allows them to gain better reviews by wine enthusiasts. They build an emotional connection between consumers, the winery and the region, which may lead to brand loyalty (Davidson et. al., 2011, p.9-10). Table 1 Calculations of Upfront Expenses & Free Cash Flow Type of expenses Calculations Results Type of expenses Calculations Results Land acquisition 100 acres x $100k $10 million Total Upfront $17.1 million per acre Expense Vines 2350 vines per acre $1.2 million Liters Produced 100 acres x 5 tons x 310,000 liters x $5 per vine 550 liters per ton Vineyard 100 acres x $32,500 $3.25 million Bottles 310k liters/0.75 1 per 413,333 bottles development per acre bottle Barrels 310k liters/225 $792,000 Winery Price $1-$12 liters x $575/barrel Crushing $500 per ton x 500 $250,000 Revenue 413,333 bottles x $11) $4.5 million per year Equipment tons of grapes per bottle Bottling equipment $650,000 EBIT Margin $1.4/$6.0 23% Other capital costs $1 million Free Cash Flow per $4.5 million per year $1.035 million (tanks, pumps, etc.) year x 23% Note. Adapted from "Robert Mondavi and The Wine Industry", by M. A. Roberto, 2005, Exhibit 9. Exhibit 10. Harvard Business School.Exhibit 10 Key Statistics for a 100 - Acre Napa Valley Ultra - Premium Vineyard Capital Investment _ Vineyard Price per Acre of Land ( Napa Valley* $ 100, 000 Vineyard Development Costs per Acre* $25,000- $40, 000 Vines per Acre 2.000 - 2, 700 Cost per Vine Yield Tons of Grapes per Acre 4 - 6 Liters of Juice per Ton of Grapes 600_ 6:40 Crushing Equipment Capital Cost per Ton $500 French Oak Barrels Barrel Capacity ( liters per barrel! 2 25 Costs per Oak Barrel $550_ 5600 Other Capital Costs Bottling and Packaging Equipment ( low - speed line* ) $600, 000 - $700, 000 Tanks , Pumps , Warehouses , etc . $ 1, 000, 000Exhibit 9 Economics of Super - Premium Wine ( Beringer's Wine estates ) $ Per Bottle Grapes , barrels , etc . 1.45 Winemaking , labor , etc. 1. 47 Marketing , Distribution , and Administration 1 . 6.8 Subtotal 4. 60 Winery Price 6.00 EBIT 1. 40 Interest 0. 48 Taxes 0. 45 Winery Net Profit 5 0. 47 Wholesaler Markup 1. 08 Retailer Markup 4.92 Final Retail Price $5 12.00 SQUICE !` Morgan Stanley Dean Witter Research ; Wine Spectator , 1994