What is the Estimate Demand Forecast over a 2-year period?

Break even:

1,000,000 (displays)

245,000 (Added Sales Reps)

3,000,000 (Marketing Investment)

Total: $4,245,000 Fixed Cost of Project

17.87 (per shirt) 0.89 (5% discount to vendors) 0.89 (5% royalty to Guardian) 0.34 (2% Ad discount for vendors) = 15.75

15.75 10.82 (COGs) = $4.93 Contribution Margin / shirt

$4,245,000 / $4.93 = 861,055 Shirts to Break Even

$861,055 x $32.49 (retail price) = $27,975,677 Break Even Sales Volume

Case Exhibit 1: Classic Knitwear Income Statement Year End: December 31, 2005 ($000) Sales 553,368 Cost of Sales 453,762 99,606 18% Gross Profit Gross nargin % SG&A SG&A as % of sales 55,337 10% EBITDA EBITDA % 44,269 8% Depreciation and Amortization Interest Expense Earnings bef Pre-tax inco ne margin % 20,135 5,534 18,600 3.4% ore income taxes 1,046 Income 1axes 17,554 Net Earnings Net income margin % 32%