Name Excel Assignment: Practice Problem FIN 310 Scenario You have an idea for a new product called Shark Attractant, a "perfume" that attracts sharks. You want to know if producing and selling this product will add value to your firm. You estimate the following items related to the project: Shark Attractant Problem Project life (years) Required return 3 20% Sales Data Unit Sales (annual) Unit Price 50,000 $4.00 Cost Data Unit cost Production facility rent (annual) Equipment cost (one-time purchase) Depreciation expense (annual) Tax rate $2.50 $12,000 $90,000 $30,000 34% Year 0 Total Capital Requirements Net working capital + equipment $110,000 Change in Net Working Capital Year 0 Year 1 Year 2 Year 3 -$20,000 $0 $0 $20,000 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. Name Excel Assignment: Practice Problem FIN 310 Scenario You have an idea for a new product called Shark Attractant, a "perfume" that attracts sharks. You want to know if producing and selling this product will add value to your firm. You estimate the following items related to the project: Shark Attractant Problem Project life (years) Required return 3 20% Sales Data Unit Sales (annual) Unit Price 50,000 $4.00 Cost Data Unit cost Production facility rent (annual) Equipment cost (one-time purchase) Depreciation expense (annual) Tax rate $2.50 $12,000 $90,000 $30,000 34% Year 0 Total Capital Requirements Net working capital + equipment $110,000 Change in Net Working Capital Year 0 Year 1 Year 2 Year 3 -$20,000 $0 $0 $20,000 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