Case 2: Motomart

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First Year J 1,200 200 240,000 1,350 324,000,000 1,492,800 240,000 37,650 32,400,000 861,000 - 6,000 39,375 2,000 167 10,000 8,333 10,000 24,167 5,000 33,333 10,000 24,000 10,000 3,500 10,000 35,227,325 288,772,675 746,400 288,026,275 387 0 2400 200 480000 1350 648000000 2985600 480000 37650 64800000 861000 0 6000 39375 2000 166.66666666666666 10000 8333.3333333333339 10000 24167 5000 33333.333333333336 10000 24000 10000 3500 10000 69360125.333333328 578639874.66666663 746400 577893474.66666663 775.24098963915674 First Year J 1,200 200 240,000 1,350 324,000,000 1,492,800 240,000 37,650 32,400,000 861,000 - 6,000 39,375 2,000 167 10,000 8,333 10,000 24,167 5,000 33,333 10,000 24,000 10,000 3,500 10,000 35,227,325 288,772,675 746,400 288,026,275 387 0 3600 200 720000 1350 972000000 4478400 720000 37650 97200000 861000 0 6000 39375 2000 166.66666666666666 10000 8333.3333333333339 10000 24167 5000 33333.333333333336 10000 24000 10000 3500 10000 103492925.33333333 868507074.66666663 746400 867760674.66666663 1163.5946873883529 First Year J 1,200 200 240,000 1,350 324,000,000 1,492,800 240,000 37,650 32,400,000 861,000 - 6,000 39,375 2,000 167 10,000 8,333 10,000 24,167 5,000 33,333 10,000 24,000 10,000 3,500 10,000 35,227,325 288,772,675 746,400 288,026,275 387 0 4800 200 960000 1350 1296000000 5971200 960000 37650 129600000 1592333.3333333333 120000 6000 39375 2000 166.66666666666666 10000 8333.3333333333339 10000 24167 3000 33333.333333333336 10000 24000 10000 3500 10000 138475058.66666669 1157524941.3333333 746400 1156778541.3333333 1550.8104787424079 First Year J 1,200 200 240,000 1,350 324,000,000 1,492,800 240,000 37,650 32,400,000 861,000 - 6,000 39,375 2,000 167 10,000 8,333 10,000 24,167 5,000 33,333 10,000 24,000 10,000 3,500 10,000 35,227,325 288,772,675 746,400 288,026,275 387 0 6000 200 1200000 1350 1620000000 7464000 1200000 37650 162000000 1592333.3333333333 120000 6000 39375 2000 166.66666666666666 10000 8333.3333333333339 10000 24167 3000 33333.333333333336 10000 24000 10000 3500 10000 172607858.66666669 1447392141.3333333 746400 1446645741.3333333 1939.1641764916039 First Year J 1,200 200 240,000 1,350 324,000,000 1,492,800 240,000 37,650 32,400,000 861,000 - 6,000 39,375 2,000 167 10,000 8,333 10,000 24,167 5,000 33,333 10,000 24,000 10,000 3,500 10,000 35,227,325 288,772,675 746,400 288,026,275 387 0 7200 200 1440000 1350 1944000000 8956800 1440000 37650 194400000 1592333.3333333333 120000 6000 39375 2000 166.66666666666666 10000 8333.3333333333339 10000 24167 3000 33333.333333333336 10000 24000 10000 3500 10000 206740658.66666669 1737259341.3333333 746400 1736512941.3333333 2327.5178742408002 First Year J 1,200 200 240,000 1,350 324,000,000 1,492,800 240,000 37,650 32,400,000 861,000 - 6,000 39,375 2,000 167 10,000 8,333 10,000 24,167 5,000 33,333 10,000 24,000 10,000 3,500 10,000 35,227,325 288,772,675 746,400 288,026,275 387 0 8400 200 1680000 1350 2268000000 10449600 1680000 37650 226800000 2319000 240000 6000 39375 2000 166.66666666666666 10000 8333.3333333333339 10000 24167 4000 33333.333333333336 10000 24000 10000 3500 10000 241721125.33333334 2026278874.6666667 746400 2025532474.6666667 2714.7358985351912 First Year J 1,200 200 240,000 1,350 324,000,000 1,492,800 240,000 37,650 32,400,000 861,000 - 6,000 39,375 2,000 167 10,000 8,333 10,000 24,167 5,000 33,333 10,000 24,000 10,000 3,500 10,000 35,227,325 288,772,675 746,400 288,026,275 387 0 9600 200 1920000 1350 2592000000 11942400 1920000 37650 259200000 2319000 240000 6000 39375 2000 166.66666666666666 10000 8333.3333333333339 10000 24167 4000 33333.333333333336 10000 24000 10000 3500 10000 275853925.33333331 2316146074.6666665 746400 2315399674.6666665 3103.089596284387 First Year J 1,200 200 240,000 1,350 324,000,000 1,492,800 240,000 37,650 32,400,000 861,000 - 6,000 39,375 2,000 167 10,000 8,333 10,000 24,167 5,000 33,333 10,000 24,000 10,000 3,500 10,000 35,227,325 288,772,675 746,400 288,026,275 387 0 10800 200 2160000 1350 2916000000 13435200 2160000 37650 291600000 2319000 240000 6000 39375 2000 166.66666666666666 10000 8333.3333333333339 10000 24167 4000 33333.333333333336 10000 24000 10000 3500 10000 309986725.33333331 2606013274.6666665 746400 2605266874.6666665 3491.4432940335832 First Year J 1,200 200 240,000 1,350 324,000,000 1,492,800 240,000 37,650 32,400,000 861,000 - 6,000 39,375 2,000 167 10,000 8,333 10,000 24,167 5,000 33,333 10,000 24,000 10,000 3,500 10,000 35,227,325 288,772,675 746,400 288,026,275 387 0 12000 200 2400000 1350 3240000000 14928000 2400000 37650 324000000 3048000 360000 8000 39375 2000 166.66666666666666 10000 8333.3333333333339 10000 24167 5000 33333.333333333336 10000 24000 10000 3500 15000 344976525.33333331 2895023474.6666665 746400 2894277074.6666665 3878.6488138620934 First Year J 1,200 200 240,000 1,350 324,000,000 1,492,800 240,000 37,650 32,400,000 861,000 - 6,000 39,375 2,000 167 10,000 8,333 10,000 24,167 5,000 33,333 10,000 24,000 10,000 3,500 10,000 35,227,325 288,772,675 746,400 288,026,275 387 0 13200 200 2640000 1350 3564000000 16420800 2640000 37650 356400000 3048000 360000 8000 39375 2000 166.66666666666666 10000 8333.3333333333339 10000 24167 5000 33333.333333333336 10000 24000 10000 3500 15000 379109325.33333331 3184890674.6666665 746400 3184144274.6666665 4267.0025116112893 First Year J 1,200 200 240,000 1,350 324,000,000 1,492,800 240,000 37,650 32,400,000 861,000 - 6,000 39,375 2,000 167 10,000 8,333 10,000 24,167 5,000 33,333 10,000 24,000 10,000 3,500 10,000 35,227,325 288,772,675 746,400 288,026,275 387 0 14400 200 2880000 1350 3888000000 17913600 2880000 37650 388800000 3048000 360000 8000 39375 2000 166.66666666666666 10000 8333.3333333333339 10000 24167 5000 33333.333333333336 10000 24000 10000 3500 15000 413242125.33333331 3474757874.6666665 746400 3474011474.6666665 4655.356209360486 First Year J 1,200 200 240,000 1,350 324,000,000 1,492,800 240,000 37,650 32,400,000 861,000 - 6,000 39,375 2,000 167 10,000 8,333 10,000 24,167 5,000 33,333 10,000 24,000 10,000 3,500 10,000 35,227,325 288,772,675 746,400 288,026,275 387 0 14400 200 2880000 1350 3888000000 116438402 18720003 451804 2527200005 23461006 2160007 78008 472509 24010 2011.0000000000002 120012 100012.99999999999 120014 290019 51016 400016.99999999994 120018 288019 120020 42021 135022 2690793704 22581206296 8956802 22572249496 30253.491822079312

Table 1

PPMC First Year
Note J F M A M J J A S O N D Annual
Stores 1,200 2,400 3,600 4,800 6,000 7,200 8,400 9,600 10,800 12,000 13,200 14,400 14,400
Multiply by 200 Carts 200 200 200 200 200 200 200 200 200 200 200 200 200
Total Carts 240,000 480,000 720,000 960,000 1,200,000 1,440,000 1,680,000 1,920,000 2,160,000 2,400,000 2,640,000 2,880,000 2,880,000
Multiply by revenue per cart 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350
Total revenues 1 324,000,000 648,000,000 972,000,000 1,296,000,000 1,620,000,000 1,944,000,000 2,268,000,000 2,592,000,000 2,916,000,000 3,240,000,000 3,564,000,000 3,888,000,000 3,888,000,000
Variable costs (VC)
Manufacturing and Installation Costs 2 1,492,800 2,985,600 4,478,400 5,971,200 7,464,000 8,956,800 10,449,600 11,942,400 13,435,200 14,928,000 16,420,800 17,913,600 116,438,402
Printing of Inserts 3 240,000 480,000 720,000 960,000 1,200,000 1,440,000 1,680,000 1,920,000 2,160,000 2,400,000 2,640,000 2,880,000 18,720,003
Replacement costs 4 37,650 37,650 37,650 37,650 37,650 37,650 37,650 37,650 37,650 37,650 37,650 37,650 451,804
Cart Rentals to Supermarkets 5 32,400,000 64,800,000 97,200,000 129,600,000 162,000,000 194,400,000 226,800,000 259,200,000 291,600,000 324,000,000 356,400,000 388,800,000 2,527,200,005
Marketing Sales and Commissions 6 861,000 861,000 861,000 1,592,333 1,592,333 1,592,333 2,319,000 2,319,000 2,319,000 3,048,000 3,048,000 3,048,000 23,461,006
Grocery Store Operation 7 - 0 - 0 - 0 120,000 120,000 120,000 240,000 240,000 240,000 360,000 360,000 360,000 2,160,007
Accounting and Audit 8 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 8,000 8,000 8,000 78,008
Advertising 9 39,375 39,375 39,375 39,375 39,375 39,375 39,375 39,375 39,375 39,375 39,375 39,375 472,509
Automobile expenses 10 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,010
Bank Charges 11 167 167 167 167 167 167 167 167 167 167 167 167 2,011
Entertainment and Promotion 12 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,012
Insurance 13 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 100,013
Legal 14 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,014
Management Fees 15 24,167 24,167 24,167 24,167 24,167 24,167 24,167 24,167 24,167 24,167 24,167 24,167 290,019
Office and Sundry 16 5,000 5,000 5,000 3,000 3,000 3,000 4,000 4,000 4,000 5,000 5,000 5,000 51,016
Public Relations 17 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 400,017
Rent 18 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,018
Salaries and Benefits 19 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 288,019
Stationery and Printing 20 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,020
Telephone and Fax 21 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 42,021
Travel and Accomodation 22 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 15,000 15,000 15,000 135,022
Total Variable Costs 35,227,325 69,360,125 103,492,925 138,475,059 172,607,859 206,740,659 241,721,125 275,853,925 309,986,725 344,976,525 379,109,325 413,242,125 2,690,793,704
Contribution Margin 288,772,675 578,639,875 868,507,075 1,157,524,941 1,447,392,141 1,737,259,341 2,026,278,875 2,316,146,075 2,606,013,275 2,895,023,475 3,184,890,675 3,474,757,875 22,581,206,296
Amortization (2 year S/L) 2 746,400 746,400 746,400 746,400 746,400 746,400 746,400 746,400 746,400 746,400 746,400 746,400 8,956,802
Net Income 288,026,275 577,893,475 867,760,675 1,156,778,541 1,446,645,741 1,736,512,941 2,025,532,475 2,315,399,675 2,605,266,875 2,894,277,075 3,184,144,275 3,474,011,475 22,572,249,496
Break Even 387 775 1,164 1,551 1,939 2,328 2,715 3,103 3,491 3,879 4,267 4,655 30,253

Table 2

Table 2
Stock Ticker No. of Stores Firm Name
KR 2419 Kroger
ABS 49 ABS Albertson’s
SWY 51 Safeway
AH.AS 75 Ahold
SVU 151 SUPERVALU
WINN 101 Winn-Dixie Stores
PUSH 91 Publix Super Markets
GAPTQ 95 Great Atlantic & Pacific
SMT 251 Smart & Final
IMKTA 101 Ingles Markets
BSI 36 Blue Square-Israel
PTMKW 101 Pathmark
RDK 156 Ruddick
WFM 501 Whole Foods Market
WMK 91 Weis Markets
MSI 75 Marsh Supermarkets
NAFC 66 Nash Finch
FRSH 75 Fresh Brands
WOM 201 Wild Oats Markets
SPTN 351 Spartan Stores
EFC 401 Eagle Food Centers
GSF 56 Gristede’s Foods
VLGEA 106 Village Super Market
FSM 253 Foodarama Supermarkets
ARDNA 651 Arden Group

1

2

3

4

5

6

7

8

9

10

11

12

13

A

B

C

PPMC

Note

J

Stores

1,200

Multiply by 200 Carts

200

Total Carts

240,000

Multiply by revenue per cart

1,350

Total revenues

1

324,000,000

Variable costs (VC)

Manufacturing and Installation Costs

2

1,492,800

Printing of Inserts

3

240,000

Replacement costs

4

37,650

Cart Rentals to Supermarkets

5

32,400,000

First Year