Exhibit 2
Selected Operating Projections for Design for Design Your Own Doll 2010
2011
20 2 012
0
6,000
Fixed Production Expense (excl depreciation)
0
1,650
Variable Production Costs
0
2,250
Revenue
Revenue Growth Production Costs
Development Costs
435
Depreciation Total Production Costs
0
310
435
4,210
Selling, General & Administrative
1,201
0
1,240
Total Operating Expenses
1,201
435
5,450
(1,201)
(435)
Operating Profit
550
Working Capital Assumptions:
Minimum Cash Balance as % of Sales
3.0%
Days Sales Outstanding
59.2x
Inventory Turnover (prod. cost/ending inv.)
12.2x
Days Payable Outstanding (based on tot. op. exp.)
33.7x
Capital Expenditures
4,610
0
310
2010
2011
20 2 012
NET WORKING CAPITAL: MINIMUM CASH REQUIRED
180.00
RECEIVABLES
101.40
INVENTORY
345.62
PAYABLES
161.86
TOTAL NET WORKING CAPITAL
0.00
CHANGE IN NET WORKING CAPITAL
1000 1000.0 .00 0
465. 465.17 17
(1000.00)
534.83
(435.00)
550.30
FREE CASH FLOW: EBIT (Operating Profit B4 Tax)
(1201.00)
TAX @ 40%
(220.12)
Earning After Tax
(1201.00)
(435.00)
DEPRECIATION
330.18 309.70
CHANGE IN NWC
(1000.00)
R&D -MARKETING TAX DEDUCTION CAPITAL EXPENDITURE
CASH FLOW
480.40 (4610.00)
0.00
534.83 174.00 (309.70)
(5811.00)
(954.60)
1039.01
Cash Flow After Horizon Value
(5811.00)
(954.60)
1039.01
CUMULATIVE FREE CASH FLOW
25530.54
Project Continuing-Horizon Value
PROJECT WACC
High Risk
9%
NET PRESENT VALUE
8187.48
PROFITABILITY INDEX
2.41
INTERNAL RATE OF RETURN PAYBACK PERIOD
20% 8.49
NPV VS DISCOUNT RATE Rate
NPV 9%
8187
10%
7050
11%
6015
12%
5072
13%
4214
14%
3430
15%
2715
16%
2061
17%
1463
18%
915
19%
413
20%
48
21%
471
22%
859
23%
1217
24%
1546
25%
1849
26%
2129
27%
2387
28%
2625
29%
2845
30%
3049
31% Cash Flow vs TIME Net Cash Flow Years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
10000
8000
6000
4000
2000
0 0.09
0.1
0.11
0.12
0.13
-2000
-4000
3237 4000
5811 6766 5727
2000
5273 5930 4740 3480
0 2010
2145 730 770
-2000
2011
2012
0.1
2020
2360 -4000
-6000
Without Terninal Value -8000
TOTAL NET WORKING CAPITAL CHANGE IN NWC FREE CASH FLOW
-5811
DISCOUNT RATE (K-WACC)
0.09
NET PRESENT VALUE PROFITABILITY INDEX INTERNAL RATE OF RETURN PAYBACK PERIOD
NPV VS DISCOUNT RATE Rate 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24%
0
-754.4894272 0.870161861 7% 8.486650881
$1,025 $520 $58 -$366 -$754 -$1,112 -$1,441 -$1,743 -$2,022 -$2,280 -$2,518 -$2,738 -$2,941 -$3,130 -$3,304 -$3,467 -$3,617 -$3,757 -$3,888 -$4,009
1000 465.1705 -1000 534.8295 -954.6 1039.01
NPV VS DISCOUNT RATE Rate NPV Project 1 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24%
NPV Project 2 1025 520 58 -366 -754 -1112 -1441 -1743 -2022 -2280 -2518 -2738 -2941 -3130 -3304 -3467 -3617 -3757 -3888 -4009
2327 1998 1695 1415 1155 915 692 485 292 113 -54 -210 -355 -491 -619 -738 -850 -955 -1054 -1147
2013
2014
2015
2016
2017
2018
2019
2020
14,360
20,222
21,435
22,721
24,084
25,529
27,061
28,685
6.0%
6.0%
6.0%
6.0%
6.0%
6.0%
139.3%
40.8%
1,683
1,717
1,751
1,786
1,822
1,858
1,895
1,933
7,651
11,427
12,182
12,983
13,833
14,736
15,694
16,712
310
310
436
462
490
520
551
584
9,644
13,454
14,369
15,231
16,145
17,113
18,140
19,229
2,922
4,044
4,287
4,544
4,817
5,106
5,412
5,737
12,566
17,498
18,656
19,775
20,962
22,219
23,553
24,966
1,794
2,724
2,779
2,946
3,123
3,310
3,509
3,719
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
59.2x
59.2x
59.2x
59.2x
59.2x
59.2x
59.2x
59.2x
12.3x
12.6x
12.7x
12.7x
12.7x
12.7x
12.7x
12.7x
33.8x
33.9x
33.9x
33.9x
33.9x
33.9x
33.9x
33.9x
310
2,192
826
875
928
983
1,043
2013
2014
2015
2016
2017
2018
2019
2020
430.80
606.65
643.04
681.63
722.53
765.88
811.83
860.54
242.69
341.75
362.26
383.99
407.03
431.46
457.34
484.78
785.96
1065.21
1129.61
1197.41
1269.25
1345.39
1426.12
1511.70
371.77
515.55
549.66
582.65
617.61
654.66
693.95
735.58
1087.68
1498.06
1585.25
1680.38
1781.20
1888.07
2001.36
2121.44
(622.51)
(410.38)
1794.30
2723.70
(87.19)
2779.20
(95.12)
2945.80
(100.82)
3122.60
(106.87)
3310.10
(113.29)
3508.56
1,105
(120.09)
3719.00
(717.72) (1089.48) (1111.68) (1178.32) (1249.04) (1324.04) (1403.42)
(1487.60)
1076.58
1634.22
1667.52
1767.48
1873.56
1986.06
2105.14
2231.40
309.70
309.70
436.20
462.40
490.10
519.50
550.70
583.80
(622.51)
(410.38)
(87.19)
(95.12)
(100.82)
(106.87)
(113.29)
(120.09)
(309.70) (2191.50)
(825.70)
(875.30)
(927.80)
(983.40) (1042.50)
(1105.00)
1190.83
1259.46
1335.04
1415.29
1590.11
454.07
(657.96)
1500.05
23170.24 454.07
(657.96)
1190.83
1259.46
1335.04
1415.29
1500.05
24760.36
NPV
4
0.15
0.16
0.17
0.18
0.19
0.2
0.21
0.22
0.23
0.24
0.25
0.26
0.27
0.28
0.29
Net Cash Flow
2013
2014
2015
2016
2017
2018
2019
0.3
1087.682 1498.058 1585.253 1680.377 1781.198 1888.068 2001.355 0 -622.511 -410.376 -87.1944 -95.1249 -100.82 -106.87 -113.287 2001.3551 454.0686 -657.956 1190.826 1259.455 1335.04 1415.29 1500.049 3591.4699
NPV 2000
1000
0 0.05 0.06 0.07 0.08 0.09 -1000
-2000
-3000
-4000
-5000
0.1
0.11 0.12 0.13 0.14 0.15 0.16 0.
Sensitivity Analysis (Without termi 4000 3000 2000 1000 0 0.05 -1000 -2000 -3000 -4000 -5000 -6000
0.06
0.07
0.08
0.09
0.1
0.11
0.12
0.13
0.14
0.15
0.16
0.17
0.18
Rate
NPV
0.31
9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 26% 27% 28% 29% 30% 31%
NPV 7282.045 6506.988 5800.219 5154.991 4565.283 4025.717 3531.487 3078.287 2662.261 2279.949 1928.244 1604.354 1305.767 1030.218 775.6679 540.275 322.3759 120.467 -66.813 -240.697 -402.302 -552.643 -692.642
8187.478 7049.649 6014.717 5072.432 4213.651 3430.209 2714.812 2060.928 1462.711 10000 914.9173 412.84 -47.7487 8000 -470.651 -859.29 -1216.75 6000 -1545.81 -1848.98 4000 -2128.53 -2386.52 -2624.79 2000 -2845.03 -3048.76 -3237.38 0
0.09 -2000
-4000 2020 Net Cash Flow
0.1
0.11
0.12
0.13
0.14
0.
.17 0.18 0.19
0.2
0.21 0.22 0.23 0.24
NPV
al value)
0.19
0.2
0.21
0.22
0.23
0.24
Project 1 Project 2
Sensitivity Chart
.15
0.16
0.17
0.18
0.19
0.2
0.21
0.22
0.23
0.24
0.25
0.26
0.27
0.28
0.29
Project 1 Project 2
0.3
0.31
