Note: All figures in yellow are assumptions and can be varied

YEAR 1967 1968 1969 1970 1971 1972 1973

0 1 2 3 4 5 6
Gross Profit 1012.0 1104.0 1196.0 1288.0 1380.0 1380.0
Ad expenses 1100.0 1050.0 1000.0 900.0 700.0 700.0

Depreciation (dedicated inv) 19.0 18.0 17.0 16.0 15.0 13.0

Dep Rate 9.5% 9.0% 8.5% 8.0% 7.5% 6.5%
Jell-O equipment depreciation
Building 133.0 12.6 12.0 11.3 10.6 10.0 8.6
Agglomerator 320.0 30.4 28.8 27.2 25.6 24.0 20.8
OH 540.0 90.0 90.0
Start-Up cost -15.0

PBT -15.0 -131.0 13.2 157.5 351.8 556.0 560.6

Tax 49.0% -7.4 -64.2 6.5 77.2 172.4 272.5 274.7
PAT -7.7 -66.8 6.7 80.3 179.4 283.6 285.9

Inv. Tax Credit 1.0 1.0 1.0 1.0 1.0 1.0

depreciation 62.0 58.8 55.5 52.2 49.0 42.4

Cash Flow -7.7 -3.8 66.5 136.8 232.6 333.5 329.3

Ded. Investment 160.0 40.0

Jell-O facilities 453.0
Inc. in WC 329.0 -55.0 -3.0 -1.0 -29.0 1.0 13.0
Capital Tax Benefit
Total Cash Flow -949.7 11.2 69.5 137.8 261.6 332.5 316.3

NPV 10.0% 585.4

A. Jell-O facilities Not Used

Less Depreciation -43.0 -40.8 -38.5 -36.2 -34.0 -29.4

Tax benefit(dep) 21.1 20.0 18.9 17.8 16.6 14.4
Tax benefit(SV-BV)
Jell-O facilities 453.0

Cash Flow 453.0 -21.9 -20.8 -19.6 -18.5 -17.3 -15.0

increment in NPV 321.6 total NPV 907.0

B. Overhead Expense not allocated

OH saved 0.0 0.0 0.0 0.0 90.0 90.0
deduct tax 0.0 0.0 0.0 0.0 44.1 44.1

Cash Flow 0.0 0.0 0.0 0.0 45.9 45.9

increment in NPV 136.5 total NPV 1043.6

C. Erosion of contribution from Jell-O

Lost Contribution -180 -200 -210 -220 -230 -230

Tax Saved -88.2 -98.0 -102.9 -107.8 -112.7 -112.7

Cash Flow -91.8 -102.0 -107.1 -112.2 -117.3 -117.3

increment in NPV -687.0 NPV (Base+ C) -101.6

 1974 1975 1976 1977
7 8 9 10
1472.0 1472.0 1564.0 1564.0
730.0 730.0 750.0 750.0
G. DEPRE. B.V.
12.0 11.0 10.0 9.0 140.0 60.0
6.0% 5.5% 5.0% 4.5%

8.0 7.3 6.7 6.0 93.1 39.9

19.2 17.6 16.0 14.4 224.0 96.0
90.0 90.0 90.0 90.0 195.9

BV 195.9
624.8 627.1 701.4 703.6 SV 0.0 0.0
306.2 307.3 343.7 344.8 profit -195.9
318.7 319.8 357.7 358.8 tax -96.0

1.0 1.0 SV salvage value

39.2 35.9 32.7 29.4 BV book value

358.8 356.7 390.3 388.2

0.0 12.0 0.0 -267.0

96.0
358.8 344.7 390.3 751.2

-27.2 -24.9 -22.7 -20.4

13.3 12.2 11.1 10.0
-66.6

-13.9 -12.7 -11.6 -77.0

 90.0 90.0 90.0 90.0
44.1 44.1 44.1 44.1

45.9 45.9 45.9 45.9

-240 -240 -250 -250

-117.6 -117.6 -122.5 -122.5

-122.4 -122.4 -127.5 -127.5

Ex.1 : Consolidated Balance Sheet

Assets

Cash 20
Marketable securities 89
Receivables 180
Inventories 261
Pre-paid expenses 14
Current Assets 564
Land, buildings, equi 332
LT receivables and sun 7
Goodwill 26

Total 929

Liabilities and Stockholder's equity

Notes payable 22
Accounts payable 86
Accrued liabilities 73
Accrued income taxes 57
Current liabilities 238
Long-term notes 39
3-3/8% debentures 22
Other non-current liabi 10
Deferred investement 9
Stockholders' equity:
Common stock 164
Retained earnings 449
Treasury stock (2)
Total stockholders' eq 611

Total 929

Shares outstanding (in 25.13

Ex. 2 - Common stock prices of General foods Corporation

Year Low High

1958 24 39
1959 37 1/8 53 7/8
1960 49 1/8 75 1/2
1961 68 5/8 107
1962 57 96
 1963 77 5/8 90 1/2
1964 78 1/4 93 1/4
1965 77 1/2 89 7/8
1966 62 83
1967 65 1/4 81

Exhibit 3 : summary statistical data 1958- to 1967 (figures in millions, except per share data)_

1958 1959 1960 1961 1962 1963 1964

Income statement

Sales to customers (ne 1009 1053 1087 1160 1189 1216 1338
Cost of sales 724 734 725 764 769 769 838
Mkg., admn. & gen. ex 181 205 236 261 267 274 322
EBIT 105 115 130 138 156 170 179
Taxes 57 61 69 71 84 91 95
PAT 48 54 61 67 72 79 84
Dividends - common s 24 28 32 35 40 45 50
Retained earnings 24 26 29 32 32 34 34
EPS 1.99 2.21 2.48 2.69 2.9 3.14 3.33
DPS 1 1.15 1.3 1.4 1.6 1.8 2

Assets, liabilities and stockholders equity

Inventories 169 149 154 189 183 205 256
Other current liabilitie 144 180 200 171 204 206 180
Current liabilities 107 107 126 123 142 162 202
Working capital 206 222 230 237 245 249 234
Land, building, equipm 203 221 247 289 328 375 436
Land, building, equipm 125 132 148 173 193 233 264
Long-term debt 49 44 40 37 35 34 23
Stockholders equity 287 315 347 384 419 454 490
Stockholders equity / 11.78 12.87 14.07 15.46 16.8 18.17 19.53

Capital program
Capital additions 28 24 35 40 42 57 70
Depreciation 11 14 15 18 21 24 26

Employment Data
Wages salaries and be 128 138 147 162 171 180 195
Employees (thousands 21 22 22 25 28 28 30
Asset / employee (tho 21 22 23 22 22 23 24
Exhibit 6 : Financial evaluation of super project

Project cost details

Buildings 80
Machinery 120
Total inves 200

Year 1968 1969 1970 1971 1972 1973 1974

Funds employed
Period 1 2 3 4 5 6 7
Net project cost 200 200 200 200 200 200 200
Deduct depreciation ( 19 37 54 70 85 98 110
Capital funds employe 181 163 146 130 115 102 90

Cash
Receivables 124 134 142 157 160 160 169
Inventories 207 222 237 251 266 266 281
Pre-paid and deffered exp.
Less: current liabilities (2) (82) (108) (138) (185) (184) (195)
Total working funds 329 274 271 270 241 242 255
Total new funds empl 510 437 417 400 356 344 345

Operating Profit

Unit volume (in thous 1100 1200 1300 1400 1500 1500 1600
Gross sales 2200 2400 2600 2800 3000 3000 3200
Deductions 88 96 104 112 120 120 128
Net sales 2112 2304 2496 2688 2880 2880 3072
Cost of goods sold 1100 1200 1300 1400 1500 1500 1600
Gross profit 1012 1104 1196 1288 1380 1380 1472
Advertising expenses 1100 1050 1000 900 700 700 730
Selling expense
Gen. and admin. Cost
Research expense
Start-up costs 15
Test marketing expen 360
Adjustments (erosion) 180 200 210 220 230 230 240
Profit before tax (643) (146) (14) 168 450 450 502
Taxes (334) (76) (7) 87 234 234 261
Add: Investment tax cr (1) (1) (1) (1) (1) (1) (1)
Net profit (308) (69) (6) 82 217 217 242
Cumulative net profit (308) (377) (383) (301) (84) 133 375
New funds to repay 818 814 800 701 440 211 (30)

Table on pag 15 (Alternative Evaluations of Super Project)

Alternative evaluations of super project

Incremental Facilities Fully
basis used basis allocated basis

Investment
Working cap 267 267 267
Fixed capital
Gross 200 653 672
Net 113 358 367
Total inve 380 625 634
Profit befo 239 211 157
ROFE 63% 34% 25%

Jell-O project
Building 200 x 2/3 = 133
Agglomerat640 x 1/2 = 320
453
1965 1966 1967

1478 1555 1652

937 965 1012
362 406 449
177 185 193
91 91 94
86 94 99
50 53 55
36 41 44
3.44 3.73 3.93
2 2.1 2.2

214 261 261

230 266 303
173 219 238
271 308 326
477 517 569
283 308 332
37 54 61
527 569 611
20.99 22.64 24.32

54 65 59
29 32 34

204 218 237

30 30 32
25 29 29
1975 1976 1977 10-yr. average

8 9 10
200 200 200
121 131 140
79 69 60 113.5

169 178 178 157.1

281 296 296 260.3

(195) (207) (207) (150.3)

255 267 267 267.1
334 336 327 380.6

1600 1700 1700 1460

3200 3400 3400 2920
128 136 136 116.8
3072 3264 3264 2803.2
1600 1700 1700 1460
1472 1564 1564 1343.2
730 750 750 841

240 250 250 225

502 564 564 240
261 293 293 125
(1) (1)
242 271 271 116
 617 888 1159 172
(283) (552) (832) 209