Table 1

Detailed book value and appraised value of Chemises en Coton manufacturing equipment (U.S. dollars)
Year of Useful Acquisition Accumulated Book
acquisition life (years) cost depreciation value
Yam spinners 1997 25 — — —
Yarn weaving 1997 25 140,000 100,800 39,200
Bleaching and dyeing 1997 25 80,000 57,600 22,400
Cutting 2002 25 50,000 26,000 24,000
Sewing 2002 20 20,000 13,000 7,000
Printing 2005 20 10,000 5,000 5,000

Exhibit 2
Current Production Cost of Staple T-Shirts (in U.S. Dollars)
Raw Direct Processing Depreciation Total cost
materials labor costs
Cotton weaving 79.50% 5.40% 11.10% 4.10% 138231
Cotton bleaching and dy 0.00% 25.90% 63.00% 11.10% 28,808
Cutting 0.00% 31.90% 55.20% 12.80% 15,568
Sewing 2.10% 86.20% 10.70% 1.00% 100,588
Printing 20.10% 18.60% 60.40% 0.90% 53,436
Total 36.50% 34.60% 25.30% 3.70% 336,630
Units per year 215000

Exhibit 3
Forecast Production Cost of Fancy T-Shirts (U.S. Dollars)

Raw Direct Processing Depreciation Total

materials labor costs cost
Cotton weaving 77% 6% 13% 4% 130,478
Cotton bleaching and 0% 24% 65% 10% 30,602
Cutting 0% 30% 58% 12% 16,418
Sewing 8% 81% 10% 1% 106,938
Printing 38% 15% 46% 1% 68,186
Total 38% 33% 25% 3% 352,621.91
Units per year 175,000

Exhibit 4a
Plant's Maximum Capacity for Staple T-Shirts
Staple Units Units per Maximum Conversion Maximum
day capacity (units to capacity
(units) T-shirts) (T-shirts)
Weaving kg 400 100,000.00 4.5 450.000.00
Bleaching and dyeing kg 500 125,000.00 4.5 562,500.00
Cutting T-shirts 1,000.00 250.000.00 1 250,000.00
Sewing T-shirts 860 215.000.00 1 215.000.00
Printing 1-shirts 900 225,000.00 1 225.000.00

Exhibit 4b
Plants Maximum Capacity for Fancy T-Shirts
Fancy Units Units per Maximum Conversion Maximum
day capacity (units) (units to capacity
T-shirts) (T-shirts)
Weaving kg 400 100,000.00 4 400,000.00
Bleaching and dyeing kg 500 125,000.00 4 500,000.00
Cutting 1-shirts 800 200,000.00 1 200.000.00
Sewing T-shirts 700 175.000.00 1 175.000.00
Printing T-shirts 900 225,000.00 1 225.000.00

Source: Prepared by the authors.

Exhibit 5a
Sewing Capacity for Staple T-Shirts

Staple Usage Employees Availability Capacity Utilization

(mln/T-shlrt) (minutes per day) (T-shirts per day) ('A)
Making collar 1 2 960 960 90%
Making sleeves 0.5 1 480 960 90%
Making front 1.1 2 960 873 99%
Making back 0.5 1 480 960 90%
Joining shoulders 0.5 1 480 960 90%
Attaching sleeves 0.5 1 480 960 90%
Attaching collar 0.45 1 480 1067 81%
Attaching back and front 1.12 2 960 860 100%
Inspection 0.6 2 960 1600 54%
Ironing 0.8 2 960 1200 72%
Packaging 0.4 1 480 1200 72%
Total 7.47 16 84%
T-shirts per year (250 days) 215,000
Source: Prepared by the authorrs.

Exhibit 5b
Sewing Capacity for Fancy T-Shirts

Fancy Usage Employees Availability Capacity Utilization

(minfT-shin) (minutes per day) (T-shirts per day) (%)
Making collar 1.3 2 960 738 95%
Making sleeves 0.63 1 480 768 91%
Making front 1.3 2 960 738 95%
Making back 0.69 1 480 700 100%
Joining shoulders 0.65 1 480 738 95%
Attaching sleeves 0.65 1 480 738 95%
Attaching collar 0.54 1 480 889 79%
Attaching back and front 1.23 2 960 782 90%
Inspection 0.75 2 960 1280 55%
Ironing 0.96 2 960 1,000 70%
Packaging 0.52 1 480 923 76%
Total 9.22 16 84%
T-shirts per year 175,000
184,500.00

Exhibit 6a
Outsourcing Costs for Staple T-Shirts

Minimum quantity UnitsCost per unit (USS)

Cost of gray fabnc 100 kg 2.7
Cost of dyed fabnc 50 kg 3.9
Cuning and printing 1000 T-shirts 0.39
Seining 1000 T-shirts 0.7
Source' Prepared by the author,

Exhibit 6b
Outsourcing Costs for Fancy T-Shirts
Minimum Cost per unit
Units
quantity (USS)
Cost of gray fabnc 100 kg 2.9
Cost of dyed fabric 50 kg 4.2
Cutting and printing 1,000 T-shirts 0.42
Sewing 1000 T-skirts 0.73
Source. Prepared by the author,

Exhibit 7
2015 P&L of Chemises en Coton (USS): 100% Staple T-Shirts
P&L 2015
Sales 419,250
COGS 122789
Gross margin 296,451
Salaries 116,496
Processing costs 85045
Plant overheads 40,000
Sales and marketing ex 30000
Administrative expenses 16000
Management overheads 40,000
EBITDA -31080
Depreciation 12,300
EBIT -43380
Financial results 3,155
EBT -46535
Taxes (30%) —
Not Income -46535
Maximum capacity 215000
Selling once 1.95
Source: Prepared by the author,

Exhibit 8
Balance Sheet of Chemises en Coton (US$)

B/S 2015

Current assets 172,346

Cash 6,139
Accounts receivable 104,813
Inventories 61394
Net fixed assets 187,600
Plant & Land 90000
Weaving mill 39,200
Bleach and dyeing mach 22,400
Cutting machine 24,000
Sewing machine 7,000
Printing machine 5000
Total assets 359,946
Current liabilities 78,586
Notes payable 61394
Salaries payable 10,104
Other processing costs 7087
Credit loan
Long-term liabilities 65,441
Long-term debt 29973
Plant mortgage 33123
Other liabilities 2345
Equity 215,919
Capital 340383
Reserves -77928
Net income for 2015 -46535
Total equity and liabilit 359,946
Appraised Replacement
value cost
— —
33,600 154,571
16,000 88,326
6,000 55,204
8,000 22,082
6,000 11,041

Cost
per unit
0.64
0.13
0.07
0.47 Sewing Labor ###
0.25
1.57

Cost per
unit
0.75
0.17
0.09
0.61 ###
0.39
2.01

Excess Market value of

capacity excess capacity
(units) (US$)
52222.22 141,000.00
77,222.22 92,666.67
35,000.00 6,825.00
— —
10,000.00 1,950.00
Total Excess

Excess Market value of

capacity excess capacity
(units) (U&S)
56250 163125
81,250.00 105625
25,000.00 5,250.00
— —
50.000.00 10,500.00

Capacity
hours
16
8
16
8
8
8
8
16
16 0.5375
16
8

860

16
8
16
8
8
8
8
16
16
16
8

700
Fancy Usage Employees Availability Capacity Utilization
(minfT-shin) (minutes per(T-shirts
day) per day) (%)
Making collar 1.3 2 960 738 95% 16
Making sleeves 0.63 1 480 768 91% 8
Making front 1.3 2 960 738 95% 16
Making back 0.69 2 960 1400 100% 16
Joining shoulders 0.65 1 480 738 95% 8
Attaching sleeves 0.65 1 480 738 95% 8
Attaching collar 0.54 1 480 889 79% 8
Attaching back and fron 1.23 2 960 782 90% 16
Inspection 0.75 2 960 1280 55% 16
Ironing 0.96 2 960 1,000 70% 16
Packaging 0.52 1 480 923 76% 8
Total 16 84%
T-shirts per year 175,000
184,500.00
700
Chemises un Coton Valuation
Book value ###
Muhammad Stake 95% ###
Ibrahim stake 5% $ 6,295.95
Interest 8% $ 9,569.84
Total Amt ###

Carlos Nuno Proposed Initial Capital Needed

Interest on Muhamed's Stake $ 6,295.95

Yearly Installments $ 21,532.15
Rent $ 5,000.00
Interest Pymt $ 3,155.00
Initially, he needs to pay $ 35,983.10

Cash nuno has $ 50,000.00

After paying cash he has $ 14,016.90

Cash at business $ 6,139.00

Total Cash $ 20,155.90

Liabilities $ 78,586.00

no of units 215000
S.P $ 2.50
Revenue ###
COGS ###
Plant overheads $ 40,000.00
Sales and marketing expenses $ 30,000.00
Administrative expenses $ 16,000.00
Management overheads $ 40,000.00
Shipping $ 26,875.00
Profit $ 47,995.00
Chemises un Coton Valuation
Detailed book value and appraised value
Book value ### equipment (U
Muhammad Stake 95% ###
Ibrahim stake 5% $ 6,295.95
Interest 8% $ 9,569.84 Yam spinners
Total Amt ### Yarn weaving
Bleaching and d
Carlos Nuno Proposed Initial Capital Needed Cutting
Interest on Muhamed's Stake $ 6,295.95 Sewing
Yearly Installments $21,532.15 Printing
Rent $ 5,000.00 Capital Investment
Interest Pymt $ 3,155.00 In 6 years
Fancy T-shirts machine $25,000.00 in 9 years
Salary for one new worker $ 5,000.00 In 11 years
Initially, he needs to pay $65,983.10
etailed book value and appraised value of Chemises en Coton manufacturing
equipment (U.S. dollars)
Year of Useful Years Book AppraiseReplacement
acquisition life (years Left valuevalue cost
1997 25 — — —
1997 25 6 ### ### ###
1997 25 6 ### ### ###
2002 25 11 ### ### ###
2002 20 6 ### ### ###
2005 20 9 ### ### ###
ital Investment
$ 264,979.00
$ 11,041.00
$ 55,204.00

Sewing Capacity for Staple

Staple

Making collar
Making sleev
Chemises en Coton Making front
YES NO Making back
FANCY YES Joining shoul
T- SHIRT NO Attaching sle
Attaching coll
Attaching bac
Inspection
Ironing
Packaging
Total
T-shirts per year (250 da
Sewing Capacity for Fancy
Fancy
(minfT-shin)
Making collar
Making sleev
Making front
Making back
Joining shoul
Attaching sle
Attaching coll
Attaching bac
Inspection
Ironing
Packaging
Total
T-shirts per year
ewing Capacity for Staple T-Shirts
Usage Employees Availability Capacity Utilization Capacity
(mln/T-shlrt) (minutes per day)
(T-shirts per day) ('A) hours
1 2 960 960 90% 16
0.5 1 480 960 90% 8
1.1 2 960 873 99% 16
0.5 1 480 960 90% 8
0.5 1 480 960 90% 8
0.5 1 480 960 90% 8
0.45 1 480 1067 81% 8
1.12 2 960 860 100% 16
0.6 2 960 1600 54% 16
0.8 2 960 1200 72% 16
0.4 1 480 1200 72% 8
7.47 16 84%
-shirts per year (250 da 215,000
ewing Capacity for Fancy T-Shirts
Usage Employees Availability Capacity Utilization
(minfT-shin) (minutes per(T-shirts
day) per day) (%)
1.3 2 960 738 95% 16
0.63 1 480 768 91% 8
 1.3 2 960 738 95% 16
0.69 1 480 700 100% 8
0.65 1 480 738 95% 8
0.65 1 480 738 95% 8
0.54 1 480 889 79% 8
1.23 2 960 782 90% 16
0.75 2 960 1280 55% 16
0.96 2 960 1,000 70% 16
0.52 1 480 923 76% 8
9.22 16 84%
-shirts per year 175,000
184,500.00