Blue Blaze: Amanda Baldauf, Matthew Di Zenzo, Lindsay Moreau, Jaclyn Wetherell E Multiplying the estimated 160,500 people

(over 21+) in Kent and Sussex County in 1990 (Table B) by the per capita consumption, 36 gallons (Table A) will produce the market size in gallons. stimated Population in 1990 for Kent and Sussex Entire Population 229,000 Population Age 21+ Population Age 21+ 160,500 Per Capita Consumption (Gallons) Total Market Size

160,500 X 36 = 5,778,000 Gallons To find the price per gallon we took the retailer questionnaire results (Table H) and found out that Coors was very expensive. Being that Michelob was the highest price at $3.68, on the retail and wholesale prices for selected beers in the market area (Table I), and the average price was $3.16, we estimated Coors was around $3.50 per six-pack. Because our industry size is measured in gallons, that price of $3.50/six pack converts to $6.20/gallon (using a conversion factor of 1.77 6-Packs = 1 Gallon). It is estimated in 1990 that Coors will have 8.9% share of the market (Table C). Multiplying the market share of Coors in 1990 times the total market size of 5,778,000 give us a unit sales of 514,242 estimated gallons sold. Multiplying the $6.20/gallon by the total estimated gallons sold in 1990 we get sales revenues of $3,188,300. To then find cost of goods sold, we took the percentage of sales of cost of goods sold for the industry, 77%, (Table F) and multiplied it by our sales revenue to get $2,454,991, leaving us with a gross profit of $773,309. Expenses are given and total $250,000, giving us operating income of $483,309. Tax in 1990 is estimated using Table E. It is stated that beer tax in Delaware is $0.06/gallon. At 514,242 gallons tax is estimated to be $30,855, giving us net income (profit) of about $450,000. South Delaware Coors Distributor Pro-Forma Income Statement For the Year Ended December 31, 1990 Sales Revenue Cost of Goods Sold Gross Profit $ 3,188,300 $ 2,454,991 $ 733,309

Operating Expenses: Salaries Expense Depreciation Expense Utilities Expense Insurance Expense Maintenance Expense Miscellaneous Expense Property Tax Expense Operating Income Tax Net Income $ 160,000 $ 50,000 $ 12,000 $ 10,000 $ 5,600 $ 2,400 $ 10,000 $ 250,000 $ 483,309 $ 30,855 $ 452,454

Based on the data found, and the pro-forma income statement, Larry should invest in the Coors Distributorship. If he invested the $800,000, in a Treasury bill in 1990, he would get about 8.5% on his money. If he invests in the Coors Distributorship, he is getting about a 43% return on his investment. Also, the estimated liquor and beer licenses for the area are increasing exponentially each year (Table D) and consumers seem to like Coors and will certainly buy it if its available (Table G). This is a growi ng market and is going to open up a lot more opportunities for Larry, so he should definitely invest in this opportunity.