You have a full-time job, but want to bake and sell cupcakes on evenings and weekends. You live in an apartment, so you will need to rent a bakery space and spend some money up front for special equipment. You want to know if this idea is worth pursuing. You estimate the following items related to the project: You estimate that your bakery will have a project life of 3 years and that the required return is 13%. Your marketing partner completes an analysis and estimates annual sales of 8,000 cupcakes at a price per cupcake of $2.50. Costs per cupcake are estimated at $1.00. You will have to rent space for $1,000 per month or $12,000 per year and purchase equipment (one-time purchase) of $1,200. Your equipment will be depreciated by the straight-line method for 3 years ($400 per year) You purchased a business guide on how to prepare cupcakes a few years back (2016) for a one- time cost of $95.00 Your tax rate is 21% Your Change in Net Working Capital Year 0 Year 1 Year 2 Year 3 -$750 $0 $0 $750 Use Excel to 1. Prepare pro forma income statement for three years 2. Prepare pro forma incremental earnings and cash flows from assets for the three years 3. Calculate the project's NPV Using an Excel Formula and Function 4. Calculate the project's IRR - Using an Excel Function 5. Insert a text box in your spreadsheet, state whether you accept or reject this project, and briefly explain your rationale. 6. After conducting the initial analysis above your marketing partner performs a sensitivity analysis and determines that, you would sell 7,950 cupcakes per year if you increased the price per cupcake to $2.60 each. How does this impact your project (NPV, IRR), will it change your decision to accept or reject it? (Type response into Excel Spreadsheet)