Caledonia Products Integrative Program

1) GENUINE MOTOR PRODUCTS Revised Pro forma Income Statement For 2007 Sales (1,000,000 units @ $30 per unit) Fixed costs Total variable costs (1,000,000 units @ $18.80 per unit) Operating Income (EBIT) Interest (10.75% x $12,000,000) Earnings before taxes Taxes (35%) Earnings after taxes Shares Earnings per share * Fixed costs include $2,800,000 in depreciation $ 30,000,000 5,800,000 18,800,000 5,400,000 1,290,000 4,110,000 1,438,500 2,671,500 2,320,000 1.15

Reported Sales $ 52.4 million (12 % in comparison with 2008).Net Income after taxes $ 1.4 million (10 % in comparison with 2008). Account Receivable $ 30 million. Account Payable and Outstanding debt $ 20 million and $ 52

Product Profitability Analysis (March 2000) Valves $10.00 16.00 30.00 $56.00 $86.15 35% $86.00 34.9% Pumps $12.50 20.00 37.50 $ 70.00 $107.69 35% $87.00 19.5% Flow Controllers $10.00 22.00 30.00 $ 62.00 $95.38 35% $105.00 41.0%

|Operating Cash Flow | | 5,956,000 | 9,916,000 | 11,500,000 | 6,748,000 | 3,580,000 |

E F 1 Units Sold Net Cash Flow 2 3 500 -$1,500 4 550 -$450 5 600 $600 6 650 $1,650 7 700 $2,700 8 750 $3,750 9 800 $4,800 10 850 $5,850 11 900 $6,900 12 13 G H I Units Sold Net Cash Flow 750 760 770 780 790 800 $3,750 $3,960 $4,170 $4,380 $4,590 $4,800 J K L Units Sold Net Cash Flow 770 771 772 773 774 775 776 777 778 779 780 $4,170 $4,191 $4,212 $4,233 $4,254 $4,275 $4,296 $4,317 $4,338 $4,359 $4,380

|(Same as 2005 as there is no change in selling price and Sales quantity) |  |  |

Operating Results: |2001 |2002 |2003 |2004 |2005 |2006 |2007 |2008 | |Net Revenue |128,313 |144,460 |159,985 |175,820 |189,007 |201,292 |211,357 |219,811 | |Less: Operating Expenses |57,741 |65,007 |71,993 |79,119 |85,053 |90,581 |95,110 |98,915 | |Broadcast Cash Flow |70,572 |79,453 |87,992 |96,701 |103,954 |110,711 |116,246 |120,896 | |Less: Corporate Expense |5,080 |5,604 |5,660 |6,328 |6,803 |7,245 |7,607 |7,911 | |EBITDA |65,492 |73,849 |82,331 |90,373 |97,151 |103,466 |108,639 |112,985 | |Less: Depreciation |90,000 |90,000 |90,000 |90,000 |90,000 |90,000

EBIT EBIT*(1-t) Dep Capex A/R Inventory A/P WC FCFF NPV 2010 2011 2012 2013 2014 2015 2016 (1,250) 583 994 1,277 1,392 1,503 1,623 (750) 350 596 766 835 902 974 0 152 152 152 152 164 178 1,470 952 152 152 334 361 389 0 729.4931507 1112.0718 1363.1471 1472.1982 1589.9708 1717.1718 0 359.661 500.121 396.008 426.724 460.858 497.724 0 330.118 496.601 605.884 653.308 705.575

Prod cost per unit 65 65 Variable Method q1 q2 Year Year Period End Mar 31, '12 Jun 30, '12 2012 2011 Production Budget 25,000 50,000 125,000 100,000 Sales 2,500,000 2,500,000 10,000,000 10,000,000 Var Cost of Goods Sold 1,125,000 625,000 2,375,000 2,875,000 Var Sell & Admin Exp 500,000 500,000 2,000,000 2,000,000 Contribution Margin 875,000 1,375,000 5,625,000 5,125,000 Fixed Costs 500,000 500,000 2,000,000 2,000,000 Net Income 375,000 875,000 3,625,000 3,125,000 Var Cost of Goods Sold Beg Inventory 650,000 650,000 650,000 650,000 Var Mfg Costs 1,125,000 2,250,000 4,000,000 4,500,000 Goods Available 1,775,000

Cost of goods sold | (9,000) | 0.900 | (8,100) | Gross profit | 6,000 | |

it |1176.2 |1239.4 |-63.2 |-5.10% | |Selling, general and administrative expenses |1069.2 |1100.4 |-31.2 |-2.84% | |Loss on sale of Polo Jeans Company business |0 |0 |0 |0.00% | |Trademark impairments |25.2 |88 |-62.8 |-71.36% | |Goodwill impairment |813.2 |78 |735.2 |942.56% | |Operating loss |-731.4 |-27 |-704.4 |2608.89% | |Interest income |7.5 |3.7 |3.8 |102.70% | |Interest expense and financing costs |49.1 |51.5 |-2.4 |-4.66% | |Gain on sale of stock in Rubicon Retail Limited |/ |/ |/ |/ | |Gain on sale of interest in Australian joint venture |0.8 |8.2

Stryker Corporation 2003 2004 2005 2006 2007 2008 2009 Year 0 1 2 3 4 5 5 Site Prep -3030000 Eng. Fees -278000 Furnishings -126000 IT -210000 Mfg Equipment -2643258 Fixed Costs, less Depreciation -704279 -1313915 -1590836 -1761324 -1845397 -1934322 Variable

Your answers to the questions below should be clear, well-written, free of grammar and spelling errors, double-spaced with margins of at least one inch on all sides, and word-processed. In preparing this assignment, you may discuss the issues with each other or with anyone else, but your written answers must be your own work. If you need to quote someone else in your answer, you must give credit to your source. This assignment is due at the beginning of class on February 13, and should be printed and submitted in hard copy in class. No late papers will be accepted. If you cannot be in class on

| | Case #4 - Conch Republic Electronics | | | | | | | | | | | | | | | | Input Area: | | | | | | | | | | | | | | | | |   |   |   |   |   |   |   |   | |   | Equipment | $15,000,000 |   |   |   |   |   | |   | Salvage value | $3,000,000 |   |   |   |   |   | |   | R&D | $750,000 | sunk cost |   |   |   |   | |   | Marketing study | $200,000 | sunk cost |   |   |   |   | |   |   |   |   |   |   |   |   | |   |   | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |   | |   | Sales(units) | 70,000 | 80,000 | 100,000 | 85,000 | 75,000 |   | |   | Depreciation rate | 14.29% | 24.49% | 17.49% | 12.49% | 8.93% |   | |   | Sales of old PDA | 80,000 | 60,000 |   |   |   |   | |

ended March 2011 (FY2011), an increase of 21.5% over FY2010.The operating profit of the company