Maria is opening a new bakery in town. The expected annual inflation rate is expected to be 4% and she has determined that her tax rate to be 20%. Using Excel, calculate the Net Present Value(NPV) of the  project and the Internal Rate of Return(IRR) to determine if Maria should go forward with the bakery.

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Variables Probability Opening Cost of Bakery Cupcakes Produced Per Year Selling Price Per Cupcake Operating Expenses(Cost per 100 Cupcakes) Clean-Up Costs Pessimistic Senario Neutral Senario Optimistic Senario 20% 60% 20% $800,000.00 $400,000.00 $200,000.00 es $ 100,000 2.50 $ 2.00 $ $80,000.00 250,000 3.00 $ 1.50 $ $50,000.00 300,000 4.00 1.00 $10,000.00 Variables Probability Opening Cost of Bakery Cupcakes Produced Per Year Selling Price Per Cupcake Operating Expenses(Cost per 100 Cupcakes) Clean-Up Costs Pessimistic Senario Neutral Senario Optimistic Senario 20% 60% 20% $800,000.00 $400,000.00 $200,000.00 es $ 100,000 2.50 $ 2.00 $ $80,000.00 250,000 3.00 $ 1.50 $ $50,000.00 300,000 4.00 1.00 $10,000.00

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To calculate the Net Present Value NPV and Internal Rate of Return IRR using Excel we need to estimate the cash flows for each scenario and discount t... View the full answer