*Excel formulas needed* A Canadian firm is evaluating a projectin the United States. This project involves the establishment of alumber mill in Wisconsin to process Canadian timber. The factoryexpects to service clients in the construction industry. All cashflow figures are in thousands. Initial Investment. The initialinvestment is CAD 60,000. The project is over a period of threeyears. This investment will be depreciated straight line to zero.Operating Results. The firm expects two likely scenarios for thefirst year of operations. Under the favorable scenario (probabilityof 40%), the firm expects to produce and sell 2,500 units of aproduct. Under the unfavorable scenario (probability of 60%), itexpects to produce and sell only 1,200 units. The selling price isexpected to be CAD 75; the variable expense is expected to be CAD25, and fixed costs excluding depreciation are expected to be CAD21,000. Additional Investment. If the firm encounters the favorablescenario during year 1, it could make an investment of CAD 35,000to enable it to produce and sell a total of 5000 units (double theunits) in the second and third years. The cost parameters remainunchanged with the exception of depreciation. This secondaryinvestment will be depreciated equally in years 2 and 3. If thefirm chooses not to make the investment in year 1, the results ofyear 1 will be repeated during years 2 and 3. Discount Rate andMiscellaneous. Assume a discount rate of 11.50 percent and zerotaxes.

a. Estimate the NPV of the project.

b. Estimate the NPV of the option to expand.

EXCEL FORMULAS only please. It will be incorrect if not runthrough Excel.

Thanks in advanced!