please answe all thre parts and use the numbers in the question.

Assignment 1: Proforma Financial Statements A friend has decided to open a coffee shop, Specialty Coffees, Inc., and has asked for your help (business major) in developing projected financial statements for the first five years. The bank is requesting five years of projected financial statements to be included in the business plan. Your friend plans to use $50,000 inherited from her grandfather to launch the business, and will borrow from the bank any additional financing, if needed. She has found a location in a strip mall that will rent her space for $2,000 per month, and estimates that utilities will cost another $1,500 per month. Salaries and wages are estimated to cost approximately $5,000 per month, but the total of these costs will rise an additional $1,000 per month for every $100,000 in sales growth. Last, estimates for advertising and promotion will run at 3% of gross sales. Use an income tax rate of 25%, combined both federal and state. Sales are estimated at $200,000 for the first year and grow 20% per year for the first two years followed by 5% annual sales growth thereafter. Your friend is expecting you to help estimate gross margin and inventory turnover. You must explain your estimates. An investment of $150,000 for fixtures and equipment is required to open. These assets will be depreciated over ten years using the straight-line method; all assets are estimated to have zero salvage value at the end of their useful lives. She expects eighty percent of sales will be on credit and debit cards. Assume a credit/debit card collection fee of 2%. All suppliers expect payment for purchases in thirty days. There is a minimum cash balance of $5,000 required by the bank. The business will borrow to maintain the minimum balance. Assume the borrowing occurs on the first of the year and interest is paid at the end of the year. Assume loan repayments happen at end of year. Any money borrowed will cost 10% for interest. Required 1. Prepare proforma financial statements for the first five years of operation (must be done in Excel) 2. What if she had to borrow all the money to get started? Prepare proforma financial statements if she had to borrow $50,000. 3. Discuss the differences you observe between (1) and (2)