Excel Assignment: Art Gallery FIN 310 Work individually. Submit your completed Excel workbook to the assignment link in Blackboard. Scenario You have a full-time job, but want to open an art gallery on evenings and weekends. You live in an apartment, so you will need to rent a gallery space and spend some money up front for decorations and equipment. You want to know if this idea is worth pursuing. You estimate the following items related to the project: Art Gallery Project Description Project life (years) Required return 3 15% Sales Data Unit Sales (annual) Unit Price 12 Cost Data Unit cost Bakery rent (annual) Equipment cost (one-time purchase) Depreciation expense (annual) Net working capital Tax rate $1,400 Year 0 Total Capital Requirements Net working capital + equipment $7,500 Change in Net Working Capital Year 0 Year 1 Year 2 Year 3 $14 $12,000 $6,000 $3,000 $1,500 35% Use Excel to 1. Prepare pro forma income statements tor three years. 2. Prepare pro forma cash flows from assets for three years. 3. Calculate the project's NPV (use Excel function) 4. Calculate the project's IRR (use Excel function) 5. Insert a text box in your spreadsheet, state whether you accept or reject this project, and briefly explain your rationale. Income Statement Sales Cost of Goods Gross Profit Fixed Costs Depreciation EBIT = Gross profit - fixed costs - depreciation Tax Expense = EBIT * tax rate Net Income Cash flow from Assets Operating cash flow = EBIT + depreciation - tax expense Change in NWC (see Project Description) Capital spending Total project cash flow Excel Functions =NPV/ =RR