*Please use Excel and show formulas for solutions!!!

Question 1: Consider the following capital budgeting and cash flow estimation problem. You have developed a new energy drink that uses various vegetables. The drink is called V-DRINK. You have an existing building that you are using to produce V-DRINK. The building is fully depreciated. You determine a need to buy $400,000 in equipment. Shipping and installation is an additional $50,000. Additionally, you determine you will need to have $[x] in inventory. What is the total initial outlay associated with the project?

Question 2: The equipment cost (equipment plus shipping and installation) can be depreciated at the rate of [x]% the first year. The remaining 5 years (years 2-6), the depreciation will be equal to $30,000 per year. What is the amount of depreciation in year 1?

Question 3: Based on some market research, you expect to sell around 200,000 bottles of V-DRINK a year at wholesale price of $[x]. Operating costs (excluding depreciation) are expected to be 50% of revenue. The firms tax rate is 40%. What is the annual operating cash flow associated with this project in year 2? (Note you will need to factor in $30,000 in depreciation in year 2 from the prior question).

In Excel, using the information from the previous questions that discussed the V-DRINK:

Compute the NPV, IRR, and payback. Also, complete an NPV profile associated with this project.

Copy and paste your cash flow analysis and results into a tab. Name that tab Inflation. Adjust the cash flows assuming that inflation will impact all variable cash flows at the rate of 2% per year.

Copy and paste your analysis into another tab and name the tab Scenario. Adjust the units sold assuming that you only expect to sell half as many as originally forecasted. If the probability of the original sales is 50% and the probability of the depressed sales forecast is 50%, what is your expected NPV?