Using excel, please explain the answer to this question:

Diana's Delicious Donuts sells Fresh Hot Glazed Donuts, and Coffee and is contemplating buying a food

truck to make and sell its products in large events like county fairs, outdoor concerts, and other similar

events. The truck will cost $$200,000.$

Sales Information

At a typical event Diana's expects to sell $4,000$ Donuts at $$2$ per piece.

Coffee sells at $$1$ and based past on experience they know they sell half as many coffees as they

sell donuts at an event.

Diana's plans to hit $10$ events per year.

Sales of donuts, and hence coffee, are expected to go up $7\%$ annually.

Item prices must remain same to attract customers in an extremely competitive market.

Cost information

Today It costs the company:

$50$ cents to produce one donut.

$30$ cents to produce one cup of coffee.

Fuel costs $$100$ per fair visit.

All three costs are expected to increase $5\%$ annually $($i$.$e$.,5\%$ higher compared to previous year's

number$)$

There are no labor costs as Diana and her family will do all the work.

Diana has asked you build a model to recommend if it is worth entering this venture. Food truck

businesses usually take a $3-$year window to stabilize. So$,$ you need to

Construct a model to calculate the profits of Diana's Delicious Donuts for $3$ years.

Calculate NPV of the profit for the $3-$year window at a discount rate of $7\mathrm{.}5\%$

Is it worthwhile for Diana's to invest in the buying the food truck today at this numbers?

Would this decision change if they were able to do twelve fairs a year instead of $10?$ Explain

your answer.

Please take care to set up the model clearly will in terms of inputs, calculations, and outputs. I will

expect ybu to use references extensively and correctly in your work.