Analysis of the Sitation and Assumptions a) Market Size � We have chosen to target 50% of the total hammer universe (owned and/or rental). � 13,000 (50% universe) x 25 weeks of work x 30 hrs per week x 20 ft driven per hour= 195 M ft/yr. � 195M x 6 (pads per set) / 10,000 feet = 117,000 pads per year. � Knowing that our maximum production capacity is 6,000 per year, the maximum market penetration is 5% (117,000 x 0.05). b) Production capacity � Current production capacity (without any additional investment) is 250 pad per month. � With additional $50,000 production will increase to 250 more, for a total production capacity of 500pads/month or 6,000 per year. � One time upfront investment of $50,000 to support an expectancy life of the product. c) Cash Flows Our financial objectives when playing with the numbers were to obtain a positive NPV, at least 50% contribution margin to our company and to offer our clients a substantial savings of at least 50%. We did a 5 year cash flow analysis assuming a lineal demand of 6,000 per year and Interest rate of 12% and a......

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