Instructions Wagner Chocolates makes a variety of chocolate candies. They are considering adding cupcakes to their menu of sweet treats. Because they are already producing at capacity, the company would need to add space and equipment. There is suitable bakery space available for rent adjacent to their current production facility. The rent would be $1,000 per month (fixed.) Wagner would also need to add ovens and other equipment at a cost of 42,000. This equipment is expected to have a useful life of four years, and for purposes of this analysis, 4 years is also the life of the project. Wagner expects the salvage value of the equipment to be zero at the end of four years. Each cupcake will sell for $2.50. Variable costs (DM, DL VFO) are expected to be $1.58 per cupcake. Wagner anticipates selling nine dozen cupcakes per day, 5 days a week, 52 weeks per year. Wagner requires a minimum rate of return on investment of 8%. 1. Create an Excel spreadsheet and enter all of the given information. This part of your spreadsheet should be highlighted in a different color and is the only place in the spreadsheet where you may enter numbers. 2. Construct an income statement that includes Sales, Cost of Goods Sold, Gross Profit, Operating Expenses, and Net Income for the proposed cupcake division. Don't enter any numbers in this section; use only formulas and cell references (referring to the cells from part 1.) *You will need to calculate depreciation on the equipment and include it as an operating expense. Consider the rent an operating expense as well. Also, calculate the annual net cash inflow from the project, which will be different from the Net Income. 3. Evaluate the proposed project by calculating the following: Accounting Rate of Return Cash Payback period Net Present Value Internal Rate of Return Again, do not enter any numbers here. Use only formulas and cell references. (The only exception is that you may enter the factor from the PV table.) 4. Add a text box and explain whether this project should be undertaken based on the results of part 3.