PART 1: Davis owns CAPSHIR, a small retailer that produces and sells two products with unique designs: t-shirts and caps. Its store is located at Montreals Eaton Center. The selling prices are, on average, $17 for caps and $21 for t-shirts. The size of the market for these products is 800k for caps and 4.8M for t-shirts per year. The maximum market-share that CAPSHIRT can acquire is 3% for caps and 0.25% for t-shirts. For this year, CAPSHIRT is targeting to make a profit of $50,000 out of caps and $45,000 out of t-shirts. Here is the list of costs: Leasing costs: $7,000 per month Utility and Internet bills: $500 per month Production and material cost: 8$ per caps and 7$ per t-shirts Salary for two salespeople: $6000 per month a) How much is the maximum marketing budget that CAPSHIRT can spend to reach its profits goals? You can divide the fixed costs equally between two products (2 marks) PART 2: Davis is considering opening a new store at Old Port to sell its products from May to August (4 months). According to Daviss estimates, he can sell 3,000 caps and 4,000 t-shirts in this new location. However, this pop-up store will have a negative impact on the annual sales of its downtown store: the sales of caps will be reduced by 20% and the sales of t-shirts will be reduced by 10% at Eaton Centre if he opens the pop-up store. He also needs to hire a new salesperson for 4 months which costs him $8,000 (in total) and to rent a kiosk from the city for $10,000 (in total). b) How much profit does this pop-up store contribute to the CAPSHIRTs bottom line? (2 marks)