please show all work if done on excel.

3. A Capital Budgeting Problem Standard Food Company plans to establish a new production line for producing ice creams. The equipment costs $500,000 with a 10-year life. For depreciation the company is using MACRS method. The project is projected to generate $ 200,000 worth of sale in the first year. The sale will grow at 10% per year until the end of year 5, and then -10% per year until the end of year 10. The annual fixed expense is $ 40,000 per year, and the variable cost is always 35% of the revenue of the same year. Starting at year 0, the company needs to maintain an inventory that is worth 15% of next year's sale. At the end of the project, no inventory needs to be maintained and all existing inventory will be liquidated. Also, at the end of the project the equipment will be sold at a market value of $ 30,000. Assuming the tax rate is 40% and the cost of capital is 9% for the company. a. Create a capital budgeting table to show the free (overall) cash flows for the new project. Please show all details for full credits (30 points) Hint: must include operating cash flows, change of networking capital, initial investment, and salvage cash flow. b. Calculate the Project's NPV, IRR, Regular Payback Period, Discounted Payback period and Modified Internal Rate of Return, assuming a 9% reinvestment rate (15 points) c. The company faces two different scenarios: one is the scenario in part a and b with 1" year sales as 200,000; in another scenario, 1" year sales is 175,000. The probability of each scenario is listed below: Bad Good Probability 40% 60% Sales at Year 1 175,000 200,000 Please solve the NPV for cach scenario (7 points), and the expected NPV and standard deviation of NPV based on all scenarios. (8 points) d. Please calculate the sensitivity of NPV to revenue (4 points) and the sensitivity of NPV to cost of equipment (4 points). (Hint: you can put a 10% increase for the variable and calculate the new NPV). Report which variable would affect NPV to a greater degree (2 points). c. One year before the project starts, the company has an option to test the market. After the testing, the company would know whether the project's sales will be good or bad (as indicated in part c.). If the sale is going to be bad, the company would not start the project. Without the test, the company would start the project nonetheless and bear the risk of bad sales. Please calculate the value of the test option, given the test costs $10,000. Show all your work for full points (7 points)