Answer to Question (2) Year 0 1 2 3 4 5 Units Sold to Entertainment Products Price per Unit (Thai baht) Revenue from Contractual Agreement= (1)x(2) in THB Units Sold to Other Retailers in Thailand Price per Unit (Thai baht) Revenue from Sales to Other Retailers in Thailand = (4) x (5) in THB Total Revenue = (3) + (6) in THB Variable Cost per Unit (effected by 11% inflation per year) Total Variable Cost = [(1) + (4)] x (8) in THB Less Cost Savings from Production of 135,000 Pairs in Thailand Fixed Operating Expenses Non Cash Expenses (Depreciation) In THB Total Expenses = (9)(10)+(11)+(12) in THB Before Tax Earnings of Subsidiary = (7)-(13) in THB Host Government Tax 20% in THB After Tax Earnings of Subsidiary in THB Net Cash Flow to subsidiary = (16)+(12) in THB Thai Baht Remitted by subsidiary (100% of Cash Flow) Withholding Tax on Remitted Fund (12%) Thai Baht Remitted after Withholding Taxes Salvage Value in THB Exchange Rate of Baht Dollar Cash Flow to Parent = (20) x (22) PV of Parent Cash Flows (23% Discount Rate) Initial Investment by Parent 15,000,000 Cumulative PV -7,736,481 1,043,004 11,697,308 20,243,187 27,099,018 32,600,088 37,015,044 40,559,182 43,404,994 47,587,030 205,000 6,000 Year 1 Year 2 225,000 5,132 Year 3 225,000 5,132 Year 4 225,000 5,132 Year 5 225,000 5,132 Year 6 225,000 5,132 Year 7 225,000 5,132 Year 8 225,000 5,132 Year 9 225,000 5,132 Year 10 225,000 5,132

1,154,700,000 1,154,700,000 1,154,700,000 1,154,700,000 1,154,700,000 1,154,700,000 1,154,700,000 1,154,700,000 1,154,700,000 205,000 6,660 355,000 7,393 355,000 8,206 355,000 9,108 355,000 10,110 355,000 11,222 355,000 12,457 355,000 13,827 355,000 15,348

6

1,230,000,000 1,365,300,000 2,624,373,000 2,913,054,030 3,233,489,973 3,589,173,870 3,983,982,996 4,422,221,126 4,908,665,449 5,448,618,649

7 8 9 10 11 12 13 14 15 16 17

1,230,000,000 2,520,000,000 3,779,073,000 4,067,754,030 4,388,189,973 4,743,873,870 5,138,682,996 5,576,921,126 6,063,365,449 6,603,318,649 3,600 3,996 4,436 4,923 5,465 6,066 6,733 7,474 8,296 9,209

738,000,000 1,718,280,000 2,572,624,800 2,855,613,528 3,169,731,016 3,518,401,428 3,905,425,585 4,335,022,399 4,811,874,863 5,341,181,098 43,875,000 28,000,000 32,000,000 31,080,000 32,000,000 34,498,800 32,000,000 38,293,668 32,000,000 42,505,971 32,000,000 47,181,628 32,000,000 52,371,607 32,000,000 58,132,484 32,000,000 64,527,058 32,000,000 71,625,034 32,000,000

754,125,000 1,781,360,000 2,639,123,600 2,925,907,196 3,244,236,988 3,597,583,056 3,989,797,192 4,425,154,884 4,908,401,921 5,444,806,132 475,875,000 95,175,000 380,700,000 412,700,000 738,640,000 1,139,949,400 1,141,846,834 1,143,952,986 1,146,290,814 1,148,885,804 1,151,766,242 1,154,963,529 1,158,512,517 147,728,000 590,912,000 622,912,000 227,989,880 911,959,520 943,959,520 228,369,367 913,477,467 945,477,467 228,790,597 915,162,389 947,162,389 229,258,163 917,032,651 949,032,651 229,777,161 919,108,643 951,108,643 230,353,248 921,412,994 953,412,994 230,992,706 923,970,823 955,970,823 231,702,503 926,810,014 958,810,014

18 19 20 21 22 23 24 25 26

412,700,000 49,524,000 363,176,000 0.0246 8,934,130 7,263,519

622,912,000 74,749,440 548,162,560 0.0242 13,282,527 8,779,485

943,959,520 113,275,142 830,684,378 0.0239 19,826,388 10,654,305

945,477,467 113,457,296 832,020,171 0.0235 19,560,396 8,545,879

947,162,389 113,659,487 833,502,902 0.0232 19,301,326 6,855,831

949,032,651 113,883,918 835,148,733 0.0228 19,049,347 5,501,070

951,108,643 114,133,037 836,975,606 0.0225 18,804,652 4,414,956

953,412,994 114,409,559 839,003,434 0.0221 18,567,458 3,544,138

955,970,823 114,716,499 841,254,324 0.0218 18,338,012 2,845,812

958,810,014 115,057,202 843,752,812 700,000,000 0.0215 33,146,597 4,182,036

Answer to Question (3) Year 0 1 2 Units Sold to Entertainment Products Price per Unit (Thai baht) Revenue from Contractual Agreement= (1)x(2) in THB Units Sold to Other Retailers in Thailand Price per Unit (Thai baht) Revenue from Sales to Other Retailers in Thailand = (4) x (5) in THB Total Revenue = (3) + (6) in THB Variable Cost per Unit (effected by 11% inflation per year) Total Variable Cost = [(1) + (4)] x (8) in THB Less Cost Savings from Production of 135,000 Pairs in Thailand Fixed Operating Expenses Non Cash Expenses (Depreciation) In THB Total Expenses = (9)(10)+(11)+(12) in THB Before Tax Earnings of Subsidiary = (7)-(13) in THB Host Government Tax 20% in THB After Tax Earnings of Subsidiary in THB Net Cash Flow to subsidiary = (16)+(12) in THB Thai Baht Remitted by subsidiary (100% of Cash Flow) Withholding Tax on Remitted Fund (12%) Thai Baht Remitted after Withholding Taxes Salvage Value in THB Exchange Rate of Baht Dollar Cash Flow to Parent = (20) x (22) PV of Parent Cash Flows (23% Discount Rate) Initial Investment by Parent Cumulative PV 15,000,000 -7,736,481 -1,628,727 7,797,573 16,170,324 23,607,769 30,214,840 36,084,602 41,299,656 45,933,245 51,946,680 205,000 6,000 6,000 Year 1 Year 2 7000 6,660 Year 3 7000 7,393 Year 4 7000 8,206 Year 5 7000 9,108 Year 6 7000 10,110 Year 7 7000 11,222 Year 8 7000 12,457 Year 9 7000 13,827 Year 10 7000 15,348

3

46,620,000

51,748,200

57,440,502

63,758,957

70,772,443

78,557,411

87,198,726

96,790,586

107,437,551

4 5

205,000 6,660

355,000 7,393

355,000 8,206

355,000 9,108

355,000 10,110

355,000 11,222

355,000 12,457

355,000 13,827

355,000 15,348

6

1,230,000,000 1,365,300,000 2,624,373,000 2,913,054,030 3,233,489,973 3,589,173,870 3,983,982,996 4,422,221,126 4,908,665,449 5,448,618,649

7 8 9 10 11 12 13 14 15 16 17

1,230,000,000 1,411,920,000 2,676,121,200 2,970,494,532 3,297,248,931 3,659,946,313 4,062,540,407 4,509,419,852 5,005,456,036 5,556,056,200 3,600 738,000,000 43,875,000 28,000,000 32,000,000 754,125,000 475,875,000 95,175,000 380,700,000 412,700,000 31,080,000 32,000,000 34,498,800 32,000,000 38,293,668 32,000,000 42,505,971 32,000,000 47,181,628 32,000,000 52,371,607 32,000,000 58,132,484 32,000,000 64,527,058 32,000,000 71,625,034 32,000,000 3,996 4,436 4,923 5,465 6,066 6,733 7,474 8,296 9,209

847,152,000 1,605,672,720 1,782,296,719 1,978,349,358 2,195,967,788 2,437,524,244 2,705,651,911 3,003,273,621 3,333,633,720

910,232,000 1,672,171,520 1,852,590,387 2,052,855,330 2,275,149,416 2,521,895,852 2,795,784,396 3,099,800,679 3,437,258,754 501,688,000 1,003,949,680 1,117,904,145 1,244,393,601 1,384,796,897 1,540,644,555 1,713,635,457 1,905,655,357 2,118,797,446 100,337,600 401,350,400 433,350,400 200,789,936 803,159,744 835,159,744 223,580,829 894,323,316 248,878,720 276,959,379 308,128,911 342,727,091 381,131,071 423,759,489

995,514,881 1,107,837,517 1,232,515,644 1,370,908,365 1,524,524,285 1,695,037,957

926,323,316 1,027,514,881 1,139,837,517 1,264,515,644 1,402,908,365 1,556,524,285 1,727,037,957

18 19 20 21 22 23 24 25 26

412,700,000 49,524,000 363,176,000 0.0246 8,934,130 7,263,519

433,350,400 52,002,048 381,348,352 0.0242 9,240,452 6,107,754

835,159,744 100,219,169 734,940,575 0.0239 17,541,220 9,426,301

926,323,316 1,027,514,881 1,139,837,517 1,264,515,644 1,402,908,365 1,556,524,285 1,727,037,957 111,158,798 815,164,518 0.0235 19,164,128 8,372,750 123,301,786 136,780,502 151,741,877 168,349,004 186,782,914 207,244,555

904,213,095 1,003,057,015 1,112,773,767 1,234,559,361 1,369,741,371 1,519,793,402 0.0232 20,938,753 7,437,445 0.0228 22,879,255 6,607,071 0.0225 25,001,114 5,869,762 0.0221 27,321,258 5,215,054 0.0218 29,858,193 4,633,589 700,000,000 0.0215 47,662,162 6,013,435

Answer to Question (4) Year 0 1 2 Units Sold to Entertainment Products Price per Unit (Thai baht) Revenue from Contractual Agreement= (1)x(2) in THB Units Sold to Other Retailers in Thailand Price per Unit (Thai baht) Revenue from Sales to Other Retailers in Thailand = (4) x (5) in THB Total Revenue = (3) + (6) in THB Variable Cost per Unit (effected by 11% inflation per year) Total Variable Cost = [(1) + (4)] x (8) in THB Less Cost Savings from Production of 135,000 Pairs in Thailand Fixed Operating Expenses Non Cash Expenses (Depreciation) In THB Total Expenses = (9)(10)+(11)+(12) in THB Before Tax Earnings of Subsidiary = (7)-(13) in THB Host Government Tax 20% in THB After Tax Earnings of Subsidiary in THB Net Cash Flow to subsidiary = (16)+(12) in THB Thai Baht Remitted by subsidiary (100% of Cash Flow) Withholding Tax on Remitted Fund (12%) Thai Baht Remitted after Withholding Taxes Salvage Value in THB Exchange Rate of Baht Dollar Cash Flow to Parent = (20) x (22) PV of Parent Cash Flows (23% Discount Rate) Initial Investment by Parent Cumulative PV 15,000,000 -7,736,481 -1,628,727 7,797,573 16,170,324 23,607,769 30,214,840 36,084,602 41,299,656 45,933,245 50,050,375 205,000 6,000 6,000 Year 1 Year 2 7000 6,660 Year 3 7000 7,393 Year 4 7000 8,206 Year 5 7000 9,108 Year 6 7000 10,110 Year 7 7000 11,222 Year 8 7000 12,457 Year 9 7000 13,827 Year 10 7000 15,348

3

46,620,000

51,748,200

57,440,502

63,758,957

70,772,443

78,557,411

87,198,726

96,790,586

107,437,551

4 5

205,000 6,660

355,000 7,393

355,000 8,206

355,000 9,108

355,000 10,110

355,000 11,222

355,000 12,457

355,000 13,827

355,000 15,348

6

1,230,000,000 1,365,300,000 2,624,373,000 2,913,054,030 3,233,489,973 3,589,173,870 3,983,982,996 4,422,221,126 4,908,665,449 5,448,618,649

7 8 9 10 11 12 13 14 15 16 17

1,230,000,000 1,411,920,000 2,676,121,200 2,970,494,532 3,297,248,931 3,659,946,313 4,062,540,407 4,509,419,852 5,005,456,036 5,556,056,200 3,600 738,000,000 43,875,000 28,000,000 32,000,000 754,125,000 475,875,000 95,175,000 380,700,000 412,700,000 31,080,000 32,000,000 34,498,800 32,000,000 38,293,668 32,000,000 42,505,971 32,000,000 47,181,628 32,000,000 52,371,607 32,000,000 58,132,484 32,000,000 64,527,058 32,000,000 71,625,034 32,000,000 3,996 4,436 4,923 5,465 6,066 6,733 7,474 8,296 9,209

847,152,000 1,605,672,720 1,782,296,719 1,978,349,358 2,195,967,788 2,437,524,244 2,705,651,911 3,003,273,621 3,333,633,720

910,232,000 1,672,171,520 1,852,590,387 2,052,855,330 2,275,149,416 2,521,895,852 2,795,784,396 3,099,800,679 3,437,258,754 501,688,000 1,003,949,680 1,117,904,145 1,244,393,601 1,384,796,897 1,540,644,555 1,713,635,457 1,905,655,357 2,118,797,446 100,337,600 401,350,400 433,350,400 200,789,936 803,159,744 835,159,744 223,580,829 894,323,316 248,878,720 276,959,379 308,128,911 342,727,091 381,131,071 423,759,489

995,514,881 1,107,837,517 1,232,515,644 1,370,908,365 1,524,524,285 1,695,037,957

926,323,316 1,027,514,881 1,139,837,517 1,264,515,644 1,402,908,365 1,556,524,285 1,727,037,957

18 19 20 21 22 23 24 25 26

412,700,000 49,524,000 363,176,000 0.0246 8,934,130 7,263,519

433,350,400 52,002,048 381,348,352 0.0242 9,240,452 6,107,754

835,159,744 100,219,169 734,940,575 0.0239 17,541,220 9,426,301

926,323,316 1,027,514,881 1,139,837,517 1,264,515,644 1,402,908,365 1,556,524,285 1,727,037,957 111,158,798 815,164,518 0.0235 19,164,128 8,372,750 123,301,786 136,780,502 151,741,877 168,349,004 186,782,914 207,244,555

904,213,095 1,003,057,015 1,112,773,767 1,234,559,361 1,369,741,371 1,519,793,402 0.0232 20,938,753 7,437,445 0.0228 22,879,255 6,607,071 0.0225 25,001,114 5,869,762 0.0221 27,321,258 5,215,054 0.0218 29,858,193 4,633,589 0 0.0215 32,632,154 4,117,130

Answer to Question (5) Year 0 1 2 3 4 5 Units Sold to Entertainment Products Price per Unit (Thai baht) Revenue from Contractual Agreement= (1)x(2) in THB Units Sold to Other Retailers in Thailand Price per Unit (Thai baht) Revenue from Sales to Other Retailers in Thailand = (4) x (5) in THB Total Revenue = (3) + (6) in THB Variable Cost per Unit (effected by 11% inflation per year) Total Variable Cost = [(1) + (4)] x (8) in THB Less Cost Savings from Production of 135,000 Pairs in Thailand Fixed Operating Expenses Non Cash Expenses (Depreciation) In THB Total Expenses = (9)(10)+(11)+(12) in THB Before Tax Earnings of Subsidiary = (7)-(13) in THB Host Government Tax 20% in THB After Tax Earnings of Subsidiary in THB Net Cash Flow to subsidiary = (16)+(12) in THB Thai Baht Remitted by subsidiary (100% of Cash Flow) Withholding Tax on Remitted Fund (12%) Thai Baht Remitted after Withholding Taxes Salvage Value in THB Exchange Rate of Baht Dollar Cash Flow to Parent = (20) x (22) PV of Parent Cash Flows (23% Discount Rate) Initial Investment by Parent Cumulative PV 15,000,000 -7,913,640 -2,106,094 6,629,399 14,191,619 20,738,582 26,406,978 31,315,001 35,564,913 39,245,132 43,900,069 205,000 6,000 6,000 Year 1 Year 2 7000 6,660 46,620,000 205,000 6,660 Year 3 7000 7,393 51,748,200 355,000 7,393 Year 4 7000 8,206 57,440,502 355,000 8,206 Year 5 7000 9,108 63,758,957 355,000 9,108 Year 6 7000 10,110 70,772,443 355,000 10,110 Year 7 7000 11,222 78,557,411 355,000 11,222 Year 8 7000 12,457 87,198,726 355,000 12,457 Year 9 7000 13,827 96,790,586 355,000 13,827 Year 10 7000 15,348 107,437,551 355,000 15,348

6

1,230,000,000 1,365,300,000 2,624,373,000 2,913,054,030 3,233,489,973 3,589,173,870 3,983,982,996 4,422,221,126 4,908,665,449 5,448,618,649

7 8 9 10 11 12 13 14 15 16 17

1,230,000,000 1,411,920,000 2,676,121,200 2,970,494,532 3,297,248,931 3,659,946,313 4,062,540,407 4,509,419,852 5,005,456,036 5,556,056,200 3,600 738,000,000 43,875,000 28,000,000 32,000,000 754,125,000 475,875,000 95,175,000 380,700,000 412,700,000 31,080,000 32,000,000 34,498,800 32,000,000 38,293,668 32,000,000 42,505,971 32,000,000 47,181,628 32,000,000 52,371,607 32,000,000 58,132,484 32,000,000 64,527,058 32,000,000 71,625,034 32,000,000 3,996 4,436 4,923 5,465 6,066 6,733 7,474 8,296 9,209

847,152,000 1,605,672,720 1,782,296,719 1,978,349,358 2,195,967,788 2,437,524,244 2,705,651,911 3,003,273,621 3,333,633,720

910,232,000 1,672,171,520 1,852,590,387 2,052,855,330 2,275,149,416 2,521,895,852 2,795,784,396 3,099,800,679 3,437,258,754 501,688,000 1,003,949,680 1,117,904,145 1,244,393,601 1,384,796,897 1,540,644,555 1,713,635,457 1,905,655,357 2,118,797,446 100,337,600 401,350,400 433,350,400 200,789,936 803,159,744 835,159,744 223,580,829 894,323,316 248,878,720 276,959,379 308,128,911 342,727,091 381,131,071 423,759,489

995,514,881 1,107,837,517 1,232,515,644 1,370,908,365 1,524,524,285 1,695,037,957

926,323,316 1,027,514,881 1,139,837,517 1,264,515,644 1,402,908,365 1,556,524,285 1,727,037,957

18 19 20 21 22 23 24 25 26

412,700,000 49,524,000 363,176,000 0.0240 8,716,224 7,086,360

433,350,400 52,002,048 381,348,352 0.0230 8,786,266 5,807,546

835,159,744 100,219,169 734,940,575 0.0221 16,255,710 8,735,493

926,323,316 1,027,514,881 1,139,837,517 1,264,515,644 1,402,908,365 1,556,524,285 1,727,037,957 111,158,798 815,164,518 0.0212 17,308,929 7,562,219 123,301,786 136,780,502 151,741,877 168,349,004 186,782,914 207,244,555

904,213,095 1,003,057,015 1,112,773,767 1,234,559,361 1,369,741,371 1,519,793,402 0.0204 18,431,767 6,546,964 0.0196 19,628,767 5,668,395 0.0188 20,904,776 4,908,023 0.0180 22,264,956 4,249,913 0.0173 23,714,812 3,680,219 700,000,000 0.0166 36,894,777 4,654,937