After analysing the financial data of Q-Vino, you notice that they are trending in the right direction and are mostly financially stable. A new 12-month cellar door venture project in terms of a partnership from a winery client as a construction proposal worth potentially millions of dollars, and an important question is whether it will be financially viable. They want you to analyse the proposal, in particular, the recommended cash flow schedule and to understand the key financial points during the cellar door project. The following cash flow schedule is summarised below.

Initially, Q-Vino has agreed to invest and outlay a start-up cost of $200,000. The proposal states that the winery client will contribute four equal investment instalment payments of $200,000 associated to project milestones at the end of the 2^nd, 6^th, 8^th and 10^th month. It is anticipated that the project will be completed in 10 months and the winery then opens their cellar door. Q-Vino has ongoing project costs of $20,000 to pay salaries and services at the end of each month for the 10 months. In additional, there are material costs of $100,000 associated for each of the project milestones at the end of the 2^nd, 6^th, 8^th and 10^th month. The partnership agreement states upon completion that the amount of return to the company is the percentage of investment contribution, and it is projected that the cellar door will produce a return of $30,000 per month at the end of each month. The current cost of capital for company is 8% per annum compounded monthly. You have been tasked with the important objective to determine whether this future project is financially viable. In addition, they want you to determine at the end of which month in the project it will be financially viable. Its time to show your Quants knowledge and expertise with Excel to determine the financial viability of this project.

1. Set up a cash inflow and outflow for the 10-month project proposal based on the information provided by the company above. By using the current 8% p.a compounded monthly cost of capital, calculate the Net Present Value of this proposal and whether it is financially viable project. Use EXCEL to calculate the net present value of the current situation.

For full marks show:

1. The full spreadsheet with all completed entries. Show how you entered cash inflow and cash outflow amounts at the beginning, 1^st, 2^nd, 3^rd months. You can type this in Word.

2. The NPV calculation (showing the calculation via the Excel function NPV and Excel cell references is OK). You can show this either in the spreadsheet or type it in Word.