1. Recalculate a new Cost-of-Sales reduced by 10% of the actual cost for each year.

Year Net Sales ($M)

Profit/

Loss

Cost of Sales ($M) Net Income ($M)

Cost

10%

New Net Income ($M) 9 353 -14% 402 -49 8 1,100 -7% 1,177 -77 7 990 +2% 970 +20 6 780 +1% 772 +8 5 575 -9% 627 -52 4 320 +0% 320 0 3 240 +4% 231 +9 2 120 -14% 137 -17 1 10 -90% 19 -9 $-167m __________