We have developed an export market for STAC and the three SuperWrap products in Australia, New Zealand, Malaysia, Indonesia. We can price the products 30% higher in these markets than we can in China. One idea we have considered is to lease a small warehouse in each of these four markets. We would then double our output in the months of January-March and November-December (when sales are low in China). We would ship half that output to the warehouses and sell that extra product there for 30% more. The COGS would go up 5% to account for shipping, tariffs and storage costs. 1. Please calculate the effect on our annual Net Income (before taxes) if we were able to do this. 2. China allows us a 30% tax credit for exports. Therefore, if we do decide to export as in my previous question, for those export sales, our tax would be only 24.5%. How would that affect our annual After-Tax Earnings and ROS?

Proforma Profit & Loss Statement Central Products - China Revenue Sales 5 Super W D40 SuperWrap RD50 SuperWrap R090 5 0 12,500 61 1 2,500 30,000 14. 6 30,000 35,000 17.0 35,000 48,000 23. 4 48,000 50,000 2435 ,000 30,000 14.6 30,000 0 0. 0 0 205,500 1000 205,500 61 14. 17.0 224 23 14. 6 0. 0 1000 51000 0 .000 36.000 48.000 1.000 90.000 5.000 200.000 202 000 23 121 S0.000 11.0 14.1 36.000 13. 6 184 48.000 18.6 2.2 11000194 121 30.000 11. 6 200.000 1.9 1000 2311.000 100.0 100.000 45.000 ,000 30.000 000 30,000 10,000 372.000 289 121 15,3 21. 5 134 & 1 27 1000 200.000 45.000 57,000 00.000 1.000 30.000 20,000 110.000 11.5 9.3 11.8 166 104 82 41 1000 231.000 44.5 23000 14.5 151000 31.8 45.000 80 45.000 36.000 11.7 57.000 10.1 57.000 10. 1 6 6,000 13. 0 .000 14. 2 50.000 14. 2 50,000 181 91.000 9 0 000 9 0 000 100 .000 59 0 ,000 59 0 .000 84 50,000 8950,000 8930,000 4 2.000 1000 2.000 1000 17.000 1000 100.000 56.000 66.000 0.000 1000 30.000 10,000 100.000 250 188 16.3 25 125 75 26 1000 1.000 56.000 66.000 .000 .000 .000 0 0.000 14.7 162 19.1 265 14.7 a 0.0 1000 10.000 23 .000 47 5.000 47 7.000 70 50.000 465 30.000 27.9 000 107,500 1000 1.275.000 470.000 568,000 78.500 0 000 360,000 180,000 1.212.900 220 11.2 13.5 18.7 14.2 S 43 100.0 TA 0 Splash Pro Total Revenue 15 4 COGS STAC SuperWrap R040 SuperWrap RD50 SuperVAS DO Ta Mats Splash Pro 8,000 15,000 16,450 2,100 34,0001 12,900 0.40 0.50 0.47 0.61 0.68 0.43 0. 40 567 000 15,000 15,490 , 00 3,090 12,900 0 116510 a 0.00 0.47 06 0. 0.43 000 0.567 1.000 15.000 16.450 0 .000 12.900 2.250 188 180 0 0.50 0.47 0.61 0.6 0.43 000 0.561 48.000 0.4 15.000 0.50 22.500 0.50 16,450 0.47 26.790 0.47 2006P1606 1000 0.67 $4.000 0.6 $4.000 0.00 12 900 0.43 12 900 0.43 2.250 0.00 4.500 0.00 141,580 0.5 0 200 0.54 000 22.500 26,790 1.000 2.000 12 900 0.000 282300 0.4 0.50 0.47 0.67 0. 0.43 0.00 12100004 22.500 0.50 25.790 0.47 1.000 0.61 000 0. 12.900 0.43 22.500 0.40 20200 0. 1 21000 22.500 26.790 1000 000 12.900 22.500 0 280 0. 0.50 0.47 067 0.000 0.43 0.40 0.0 7 2.000 27.500 3 0,650 30 .000 12 900 13,500 291750 0.48 0.50 0.47 067 0. 0.43 0.40 0.52 48.000 2 7.500 30,650 300 000 12 900 4.500 217.750 0. 0.50 0.47 0.67 0.8 0.43 0.40 0.54 000 0.40 27,500 0.50 2 500 000 30,650 0.47 04723900.47 .30 OKT 50250P 4.000 0.68 $4000 0. 12.900 0.43 12,900 0.43 00.40 0 0.00 184 250 0.567 61,525 0.53 235.000 50.0 266,900 47.0 5250 4 0 t 1 154,800 43.0 B1,000 450 2.782 375 589 Total Core 116510 Groms Pro 890133 890 133 111.220 14.9 116 140 151 1710 158 2 21.210 471 22710 480 23710 480 219.250 468 10.250 156 151750 44.3 45.825 127 120175461 n Sery Payrol pre Outside services 30,000 10,000 14. 8 4. 9 Supplies (office and operating Repairs and manance IN Accounting and logs 30,000 14.8 0.000 121 0.000 11.8 0.000 1 .000 2 .000 53 .000 53 0 .000 4 0 .000 7. 5 .000 RM 0.000 23.9 0.0005 1 0,000 49 10,000 4.0 10.000 39 10,000 27 10,000 21 10,000 1. 8 1 0,000 1. 8 1 0,000 21 10,000 25 10,000 29 10,000 9. 120.000 28 006 .000 240 . 0 00 6.000 1. 2 00 0.0 6.000 1.3 0.0 00 12.000 11.2 0.000 0.7 1.000 0.5 1.000 04 1.000 0 .000 1.000 2 1 .000 2 1 .000 2 1 .000 02 1.000 1.000 1.000 09 12.000 03 2,500 1. 2 2.000 1.0 2.000 1.0 2.000 07 2.000 252.000 242.000 242.90005 2.500 06 2,000 07 2.500 23 30,000 01 3,000 1.5 3.000 1.2 3.000 1.2 2,000 00 3,000 06 3 ,000 05 3,000 05 3.000 06 3.000 3.000 0.9 2000 20 0 0009 250 1 250 1 250 125001 25000 25000 250 01 250 01 250 01 250023000 01 1,500 0.7 1.500 0. 1 ,500 0. 1 ,500 0.4 1,500 0.3 1,500 0.9 1,500 0.9 1,500 03 1,500 0.4 1.500 0.4 1,600 1,4 18,000 04 7,000 3.4 7.000 2 7 .000 277 .000 1.9 7.000 1.5 7,000 1.2 7.000 1.2 7.000 1.5 7.000 1.8 7,000 21 7,000 B4,000 20 10 02 35000 35000 35001 35001 350 01 350 01 35000 350 01 350 03 420001 300 0130001 3000 13001 300 01 300 01 30001 3001 300 01 300 01 300037 3.600 01 1.000 0.5 1.000 0.4 1.000 0.4 1.000 03 1 ,000 02 1.000 0.2 1.000 2 0. 1 ,000 0.2 1,000 0.3 1.000 0.3 1.000 09 12.000 03 10000 10000 100 00 00 00 00 00 10000 10000 100 00 00 00 00 00 0 0 1.200 00 000000000000000000 000 000000 000000000000 ,000 1. 5 3 .000 1.2 3.000 1.2 3.000 a 3.000 LB 3.000 OS 3.000 OS 3.000 0.6 3.000 a 3.000 9 3 .000 28 38.000 09 ,500 1.2 2.600 1.0 2.000 1.0 2.000 07 2.900 OG 2,000 0.4 2.000 0. 4 2 .000 0.6 2.600 06 2900 07 2900 23 30,000 07 2,500 204 21500 27.6 2.500 2.2 2.900 160 2.500 14.2 2.500 11.1 .500 11.1 3.500 14.6 2.500 156 2.500 184 74,500 63 7 11000 165 1,000 05 2.500 1.2 3,000 1.5 25001 1,500 0.7 7.000 3.4 350 02 3000.1 1,000 0.5 10000 0 0.0 3,000 5 1. 2,600 2 1. 2.500 30,4 Telephone Tas ireal estate e Depreciation Niso, unspecified Total Expenses 3 2 Not Income 26,490 129 26,490 129 42.740 2 17. 5 40 208 109,210 210 152,710 29 207.210 369 207,210 369 10,750 21 118,750 299 250 260 20575 -266 1.10.2017 21.5 | | | Profits Tax (35%) After Tax Eamings ROS 9,2721 17,219 0.00 9,2721 1 7,219 0.00 14,959 27,781 0.11 | 18,879| 5,051 0.14 3 37,5241 89,687| 0.19 55,549_172,5241 103,162] 134,687] 0.21 0.24 72,5241 134,687| 1 0.24 0.00 52,763| 97,9801 0.21 | | 41,913| 77,830 0.19 30,886|1 57,383 0.17 o 20,575 0.27 |408,081 7 54,114 0.19 Proforma Profit & Loss Statement Central Products - China Revenue Sales 5 Super W D40 SuperWrap RD50 SuperWrap R090 5 0 12,500 61 1 2,500 30,000 14. 6 30,000 35,000 17.0 35,000 48,000 23. 4 48,000 50,000 2435 ,000 30,000 14.6 30,000 0 0. 0 0 205,500 1000 205,500 61 14. 17.0 224 23 14. 6 0. 0 1000 51000 0 .000 36.000 48.000 1.000 90.000 5.000 200.000 202 000 23 121 S0.000 11.0 14.1 36.000 13. 6 184 48.000 18.6 2.2 11000194 121 30.000 11. 6 200.000 1.9 1000 2311.000 100.0 100.000 45.000 ,000 30.000 000 30,000 10,000 372.000 289 121 15,3 21. 5 134 & 1 27 1000 200.000 45.000 57,000 00.000 1.000 30.000 20,000 110.000 11.5 9.3 11.8 166 104 82 41 1000 231.000 44.5 23000 14.5 151000 31.8 45.000 80 45.000 36.000 11.7 57.000 10.1 57.000 10. 1 6 6,000 13. 0 .000 14. 2 50.000 14. 2 50,000 181 91.000 9 0 000 9 0 000 100 .000 59 0 ,000 59 0 .000 84 50,000 8950,000 8930,000 4 2.000 1000 2.000 1000 17.000 1000 100.000 56.000 66.000 0.000 1000 30.000 10,000 100.000 250 188 16.3 25 125 75 26 1000 1.000 56.000 66.000 .000 .000 .000 0 0.000 14.7 162 19.1 265 14.7 a 0.0 1000 10.000 23 .000 47 5.000 47 7.000 70 50.000 465 30.000 27.9 000 107,500 1000 1.275.000 470.000 568,000 78.500 0 000 360,000 180,000 1.212.900 220 11.2 13.5 18.7 14.2 S 43 100.0 TA 0 Splash Pro Total Revenue 15 4 COGS STAC SuperWrap R040 SuperWrap RD50 SuperVAS DO Ta Mats Splash Pro 8,000 15,000 16,450 2,100 34,0001 12,900 0.40 0.50 0.47 0.61 0.68 0.43 0. 40 567 000 15,000 15,490 , 00 3,090 12,900 0 116510 a 0.00 0.47 06 0. 0.43 000 0.567 1.000 15.000 16.450 0 .000 12.900 2.250 188 180 0 0.50 0.47 0.61 0.6 0.43 000 0.561 48.000 0.4 15.000 0.50 22.500 0.50 16,450 0.47 26.790 0.47 2006P1606 1000 0.67 $4.000 0.6 $4.000 0.00 12 900 0.43 12 900 0.43 2.250 0.00 4.500 0.00 141,580 0.5 0 200 0.54 000 22.500 26,790 1.000 2.000 12 900 0.000 282300 0.4 0.50 0.47 0.67 0. 0.43 0.00 12100004 22.500 0.50 25.790 0.47 1.000 0.61 000 0. 12.900 0.43 22.500 0.40 20200 0. 1 21000 22.500 26.790 1000 000 12.900 22.500 0 280 0. 0.50 0.47 067 0.000 0.43 0.40 0.0 7 2.000 27.500 3 0,650 30 .000 12 900 13,500 291750 0.48 0.50 0.47 067 0. 0.43 0.40 0.52 48.000 2 7.500 30,650 300 000 12 900 4.500 217.750 0. 0.50 0.47 0.67 0.8 0.43 0.40 0.54 000 0.40 27,500 0.50 2 500 000 30,650 0.47 04723900.47 .30 OKT 50250P 4.000 0.68 $4000 0. 12.900 0.43 12,900 0.43 00.40 0 0.00 184 250 0.567 61,525 0.53 235.000 50.0 266,900 47.0 5250 4 0 t 1 154,800 43.0 B1,000 450 2.782 375 589 Total Core 116510 Groms Pro 890133 890 133 111.220 14.9 116 140 151 1710 158 2 21.210 471 22710 480 23710 480 219.250 468 10.250 156 151750 44.3 45.825 127 120175461 n Sery Payrol pre Outside services 30,000 10,000 14. 8 4. 9 Supplies (office and operating Repairs and manance IN Accounting and logs 30,000 14.8 0.000 121 0.000 11.8 0.000 1 .000 2 .000 53 .000 53 0 .000 4 0 .000 7. 5 .000 RM 0.000 23.9 0.0005 1 0,000 49 10,000 4.0 10.000 39 10,000 27 10,000 21 10,000 1. 8 1 0,000 1. 8 1 0,000 21 10,000 25 10,000 29 10,000 9. 120.000 28 006 .000 240 . 0 00 6.000 1. 2 00 0.0 6.000 1.3 0.0 00 12.000 11.2 0.000 0.7 1.000 0.5 1.000 04 1.000 0 .000 1.000 2 1 .000 2 1 .000 2 1 .000 02 1.000 1.000 1.000 09 12.000 03 2,500 1. 2 2.000 1.0 2.000 1.0 2.000 07 2.000 252.000 242.000 242.90005 2.500 06 2,000 07 2.500 23 30,000 01 3,000 1.5 3.000 1.2 3.000 1.2 2,000 00 3,000 06 3 ,000 05 3,000 05 3.000 06 3.000 3.000 0.9 2000 20 0 0009 250 1 250 1 250 125001 25000 25000 250 01 250 01 250 01 250023000 01 1,500 0.7 1.500 0. 1 ,500 0. 1 ,500 0.4 1,500 0.3 1,500 0.9 1,500 0.9 1,500 03 1,500 0.4 1.500 0.4 1,600 1,4 18,000 04 7,000 3.4 7.000 2 7 .000 277 .000 1.9 7.000 1.5 7,000 1.2 7.000 1.2 7.000 1.5 7.000 1.8 7,000 21 7,000 B4,000 20 10 02 35000 35000 35001 35001 350 01 350 01 35000 350 01 350 03 420001 300 0130001 3000 13001 300 01 300 01 30001 3001 300 01 300 01 300037 3.600 01 1.000 0.5 1.000 0.4 1.000 0.4 1.000 03 1 ,000 02 1.000 0.2 1.000 2 0. 1 ,000 0.2 1,000 0.3 1.000 0.3 1.000 09 12.000 03 10000 10000 100 00 00 00 00 00 10000 10000 100 00 00 00 00 00 0 0 1.200 00 000000000000000000 000 000000 000000000000 ,000 1. 5 3 .000 1.2 3.000 1.2 3.000 a 3.000 LB 3.000 OS 3.000 OS 3.000 0.6 3.000 a 3.000 9 3 .000 28 38.000 09 ,500 1.2 2.600 1.0 2.000 1.0 2.000 07 2.900 OG 2,000 0.4 2.000 0. 4 2 .000 0.6 2.600 06 2900 07 2900 23 30,000 07 2,500 204 21500 27.6 2.500 2.2 2.900 160 2.500 14.2 2.500 11.1 .500 11.1 3.500 14.6 2.500 156 2.500 184 74,500 63 7 11000 165 1,000 05 2.500 1.2 3,000 1.5 25001 1,500 0.7 7.000 3.4 350 02 3000.1 1,000 0.5 10000 0 0.0 3,000 5 1. 2,600 2 1. 2.500 30,4 Telephone Tas ireal estate e Depreciation Niso, unspecified Total Expenses 3 2 Not Income 26,490 129 26,490 129 42.740 2 17. 5 40 208 109,210 210 152,710 29 207.210 369 207,210 369 10,750 21 118,750 299 250 260 20575 -266 1.10.2017 21.5 | | | Profits Tax (35%) After Tax Eamings ROS 9,2721 17,219 0.00 9,2721 1 7,219 0.00 14,959 27,781 0.11 | 18,879| 5,051 0.14 3 37,5241 89,687| 0.19 55,549_172,5241 103,162] 134,687] 0.21 0.24 72,5241 134,687| 1 0.24 0.00 52,763| 97,9801 0.21 | | 41,913| 77,830 0.19 30,886|1 57,383 0.17 o 20,575 0.27 |408,081 7 54,114 0.19