Excel Advanced Excel For Finance EXERCISE
Excel Advanced Excel For Finance EXERCISE
Excel Advanced Excel For Finance EXERCISE
Assets
Cash and cash equivalents
Short-term investments
Accounts Receivable
Inventories
Total current assets
Fixed assets
Total assets
a. The company’s sales for 2011 were 455,150, and EBITDA was 15 percent
Further, depreciation amounted to 11% of net fixed assets, interest charges
corporate tax rate was 32%, and Timberland pays 40% of its net income
out in dividends. Given this information, construct Timberlandland's 20
All figures above are in thousands also.
The input information required for the problem is outlined in the "Key Input Dat
this data and the balance sheet above, we constructed the income statement show
Sales Revenue
EBITDA as a percent of sales
Depr. as a % of Fixed Assets
Tax rate
Interest Expense
Dividend Payout Ratio
Sales
Expenses excluding depreciation and amortization
EBITDA
Depreciation (no amortization charges)
EBIT
Interest Expense
EBT
Taxes (40%)
Net Income
Common dividends
Addition to retained earnings
b. Next, construct the firm’s statement of retained earnings for the year en
then its 2011 statement of cash flows.
Working Capital= CA - CL
NOWC = Operating CA - Operating CL
Cash+A/R+Invty A/P=Accrual
Net Operating Working Capital
NOWC11 =
Operating
current Operating current
= assets - liabilities
= 233,259 61,238
172,021
NOWC10 =
Operating
current Operating current
= assets - liabilities
= 195,134 45,765
149,369
Total Net Operating Capital
TOC11 =
= NOWC + Fixed assets
= 172,021 + 67,165
239,186
TOC10 =
= NOWC + Fixed assets
= 149,369 + 42,436
191,805
Net Operating Profit After Taxes (NO INTEREST)
NOPAT11 =
= EBIT x (1-T)
= 60,884 x 60%
36,531
Operating Cash Flow
OCF11 =
= NOPAT + Depreciation
= 36,531 + 7,388
43,919
Free Cash Flow - free to be distributed to investors after all investments ma
FCF11 =
= OCF - Gross investment in operating capita
= 43,919 - 54,769.15
(10,850)
or
FCF11 =
= NOPAT - Net investment in operating capital
= 36,531 - 47,381.00
(10,850)
d. Calculate the firm’s EVA and MVA for 2011. Assume that Laiho had 10
the year-end closing stock price was 17.25 per share, and its after-tax cos
455,150
15%
11%
40%
8,575
40%
2011 2010
455,150 364,120
386,878 321,109
68,273 43,011 $5,145
7,388 6,752
60,884 36,259 $3,430
8,575 7,829 $8,575
52,309 28,430
20,924 11,372
31,386 17,058
12,554 6,823
18,831 10,235
``
38,774
31,386
70,160
12,554
57,605
31,386
7,388
38,774
(17,838)
(3,462)
7,652
7,821 32,947
(32,117)
3,700
2,500
10,000
12,350
(12,554) 15,995
16,825
74,625
91,450
perating capital, net operating profit after taxes, operating
47,381
NIAT
Net Cash Flow - NIAT+DEPRC
ter all investments made to Operations- via dividends, T/S, Interest, Principal, Inv. In Non
nt in operating capital
3,700
(32,117)
2,500
12,350
10,000
(32,117) 15,995
16,825
16,825
0
rest, Principal, Inv. In Non -oprating asset
Income Statement (Thousands)
2009 2010
Sales 400,000.00 420,000.00
Costs 344,000.00 361,994.20
Operating Profit 56,000.00 58,005.80
Interest Expense 11,678.70 12,262.80
Earnings Before Taxes 44,321.30 45,743.00
Taxes (see below for tax rate) 17,728.52 18,297.20
Net Income 26,592.78 27,445.80
Other Data
Tax rate 40% 40%
Expected growth rate
Weighted average cost of capital (WACC)
Number of shares of stock (000)
FCF
Value of operations
Plus the value of non-operating assets
Total value of the corporation
Minus value of debt
Value of equity
Price per share
EVA
EVA based on ROIC
2011
441,000.00
374,881.60
66,118.40
12,875.50
53,242.90
21,297.16
31,945.74
23,400.00
8,545.74
2011
176,400.00
176,400.00
220,500.00
396,900.00
66,150.00
66,150.00
150,223.00
216,373.00
180,527.04
396,900.04
40%
5.00%
10.02%
10,000
2011
39,671.04
176,400.00
66,150.00
110,250.00
220,500.00
330,750.00
15,707.70 Net investment in operating capital
12.59% NOPAT/total net operating capital beginning
23,963.34 NOPAT -net investment in operating capital
2011
23,963.34
501,225.24 This is also the horizon value calculation
0 Value of operation= FCFt +1 gordon model
501,225.24 (return-growth rate)
216,373.00 = 23963.34(1+5%)
284,852.24 10.02%-5%
28.49 = 25161.507
5.02%
8,103.80 501225.24
8,103.80
gordon model
Strategic planning is one of the core functions of an organization, and it involves the coordination of
plans with financial plans. While operational plans outline how the firm intends to reach its corpora
financial plans outline the manner in which the firm will obtain the necessary productive assets to op
Financial planning generally begins with a sales forecast, and that forecast generally starts with a rev
firm's recent history. Here are XYZ Co sales over the past 5 years:
Annual Growth
Sales Rate
2007 2,058
2008 2,534 23.1%
2009 2,472 -2.4%
2010 2,850 15.3%
2011 3,000 5.3%
Average = 10.3%
The first step in a sales forecast are several ways to estimate the historical growth rate, ranging from
The simplest are to estimate the average annual growth rate and the compound annual growth rate.
You could always use the estimated interecept and slope to project the future sales, but an even easie
function. This allows you to specify the past years and sales, and then specify a projected year. It th
gives you the projected value. See below for details.
to regress the natural log (LN) of sales versus the years. The slope coefficient is the estimate of the h
chart below; we plotted the trendline and the regression equation. NaturalLog(LN)ofSales
Management started with the regression prediction, then modified it based on qualitative data to
3,300, the forecasted value given in the text. Management's sales forecast represents a growth rate o
We examine a forecasting method for a firm using the percentage of sales of method. This forecastin
items on the financial statements are proportional to sales. In particular, it assumes that the followin
(1) Costs; (2) Cash (i.e., the company needs a certain amount of cash on hand, since it does not know
or deposits will clear the bank); (3) Accounts receivable (the proportion will depend on the firm's cre
plant and equipment (this is reasonable for the long-term; in the short-term, firm's often have excess
in this model); (6) Accounts payable; and (7) Accruals. It also assumes that Depreciation is proporti
Other items on the financial statements are a direct result of the firm's financial policies (i.e., dividen
policy), which we discuss below.
items on the financial statements are proportional to sales. In particular, it assumes that the followin
(1) Costs; (2) Cash (i.e., the company needs a certain amount of cash on hand, since it does not know
or deposits will clear the bank); (3) Accounts receivable (the proportion will depend on the firm's cre
plant and equipment (this is reasonable for the long-term; in the short-term, firm's often have excess
in this model); (6) Accounts payable; and (7) Accruals. It also assumes that Depreciation is proporti
Other items on the financial statements are a direct result of the firm's financial policies (i.e., dividen
policy), which we discuss below.
The next step is to analyze the historical "Pro Forma" ratios. The actual historical statements are sh
the Pro Forma analysis are shown below the actual statements.
INCOME STATEMENT
(in thousands) 2010 2011
BALANCE SHEET
(in thousands)
2010 2011
Assets
Cash 15.0 10.0
ST Investments 65.0 0.0
Accounts receivable 315.0 375.0
Inventories 415.0 615.0
Total current assets 810.0 1,000.0
Net plant and equipment 870.0 1,000.0
Total assets 1,680.0 2,000.0
2010 2011
Liabilities and equity
Accounts payable 30.0 60.0
Accruals 130.0 140.0
Notes payable 60.0 110.0
Total current liabilities 220.0 310.0
Long-term bonds 580.0 754.0
Total liabilities 800.0 1,064.0
Preferred stock 40.0 40.0
Common stock 130.0 130.0
Retained earnings 710.0 766.0
Total common equity 840.0 896.0
Total liabilities and equity 1,680.0 2,000.0
a
Required assets include all forecasted operating assets plus the short-term investments fro
b
Specified sources of financing include forecasted operating current liabilities, forecasted lo
forecasted preferred stock, forecasted common equity, and the amount of notes payable fr
t involves the coordination of operating
m intends to reach its corporate objectives,
cessary productive assets to operate. 3,500
cast generally starts with a review of the
3,000
f(x) = 219.999999999985 x − 439397.19999997
R² = 0.903786341921051
2,500
2058.00
2,000
23.1% 2261.33 203.33 Column
-2.4% 2484.75 223.42 Linear (
15.3% 2730.25 245.50 1,500 Linear (
5.3% 3000.00 269.75
10.3% 1,000
500
SALES
EPT function) EQUATION
SALES = 220 YEAR - 439397
fficient is the estimate of the historical sales growth rate. See the
NaturalLog(LN)ofSales
100.00% 100.00%
87.61% 87.21%
3.16% 3.33%
90.77% 90.54%
9.23% 9.46%
2.11% 2.93%
7.12% 6.53%
2.85% 2.61%
4.27% 3.92%
0.14% 0.13%
4.13% 3.78%
2010 2011
0.9% 0.5%
3.9% 0.0%
18.8% 18.8%
24.7% 30.8%
48.2% 50.0%
51.8% 50.0%
100.0% 100.0%
2010 2011
1.8% 3.0%
7.7% 7.0%
3.6% 5.5%
13.1% 15.5%
34.5% 37.7%
47.6% 53.2%
2.4% 2.0%
7.7% 6.5%
42.3% 38.3%
50.0% 44.8%
100.0% 100.0%
10%
40%
8%
8%
10%
10%
23
50.0
2011 Dividen 1.2
62.1
68.54
Interest rate
8%
10%
-
`
Column E
Linear (Column E)
Linear (Column E)
2011 2012
INCOME STATEMENT
(in thousands) 2010
Sales 2,850.00
Costs except depreciation 2,497.00
Depreciation 90.00
Total operating costs 2,587.00
EBIT 263.00
Less Interest 60.00
Earnings before taxes (EBT) 203.00
Taxes (40%) 81.20
NI before preferred dividends 121.80
Preferred dividends 4.00
NI available to common 117.80
BALANCE SHEET
(in thousands)
2010
Assets
Cash 15.0
ST Investments 65.0
Accounts receivable 315.0
Inventories 415.0
Total current assets 810.0
Net plant and equipment 870.0
Total assets 1,680.0
2010
Liabilities and equity
Accounts payable 30.0
Accruals 130.0
Notes payable 60.0
Total current liabilities 220.0
Long-term bonds 580.0
Total liabilities 800.0
Preferred stock 40.0
Common stock 130.0
Retained earnings 710.0
Total common equity 840.0
Total liabilities and equity 1,680.0
Other Inputs
Actual
2011
(1)
1 Sales 3,000.0
2 Costs except depreciation 2,616.2
3 Depreciation 100.0
4 Total operating costs 2,716.2
5 EBIT 283.8
6 Less Interest 88.0
7 Earnings before taxes (EBT) 195.8
8 Taxes (40%) 78.3
9 NI before preferred dividends 117.5
10 Preferred dividends 4.0
11 NI available to common 113.5
MicroDrive, Inc.: Actual and First Pass Projected Balance Sheets (Thousands)
Actual
2011
(1)
Assets
1 Cash 10.0
2 ST investments 0.0
3 Accounts receivable 375.0
4 Inventories 615.0
5 Total current assets 1,000.0
6 Net plant and equipment 1,000.0
7 Total assets 2,000.0
Notes payable
Long-term debt
Preferred stock
Common stock
Total
Note: if the AFN is negative, then the firm has more than it needs to finance the assets. It could
financing by paying off debt, buying back stock, or paying a larger dividend. Instead, we assu
any extra funds to purchase additional short-term investments.
New short-term investments =
New shares of stock
New equity issued = 56.9
Stock price = $23.00
# new shares issued = 2.473
Percentage of Sales Method
Common Size statements
2011 2010 2011
57.50
55.98
50
1.2
23.0
10%
40%
8%
nvestments 8.0%
10.0%
10%
25%
25%
0%
50%
Forecast
Forecast Basis 2012
(2) (3)
10% 2011 Sales 3,300.00
87.2% 2012 sales 2,877.60
10% 2012 NPE 110.00
2,987.60
312.40
86.76
225.64
90.26
135.38
10% of average 4.00
131.38
52.47
8% 2011 DPS 1.24
65.17
66.21
ets (Thousands)
Forecast
Forecast Basis 2,012.00
(2) (3)
2,200.0
2,086.2
113.8
25% 28.4
25% 28.4
0%
50% 56.9
ABC collects 20% of sales in the month of the sale, 50% in the month following, and the remaining 30%,
two months following the sale. During November and December 2011, sales were 220,000 and 175,000 respectiv
ABC purchases raw materials two months in advance of its sales equal to 65% of its final sales. The supplier is pai
one month after delivery. Thus purchases for April sales are made in February and payment made in March.
In addition, ABC pays 10,000 per month for rent and 20,000 each month for other expenditures. Tax prepayment
22,500 are made each quarter beginning in March. The company's cash balance as of Dec 31, 2011 was 22,000.
A minimum balance of 20,000 must be maintained at all times to satisfy the bank's line of credit agreement.
ABC has arranged for a short term credit with its bank at an interest rate of 12% p.a. (1% per month) to be paid m
Borrowing to meet estimated monthly cash needs takes place at the end of the month, and interest is not paid un
end of the following month. Consequently, if the firm were to borrow 50,000 during the month of April, then it w
500 in interest during May. Finally, ABC follows a policy of repaying its outstanding short-term debt in any month
its cash balance exceeds the minimum cash balance of 20,000.
a) What will be the cash requirement for the next 6 months so that it can renegotiate the terms of a short-term c
arrangement with its bank, if necessary. To evaluate the problem, ABC plans to evaluate the impact of a +/- 20%
in its monthly sales efforts. Prepare a 6-month cash budget and use it to evaluate the firm's cash requirements.
b) ABC has a note due in June. Will the firm have sufficient cash to repay the loan?
Jan May
Feb Jun
Mar Jul
Apr Aug
Collection
1st Month Purchases disb
2nd Month % of Sales
3rd Month Interest rate
Cash Budget for January to June, 2012
Nov Dec Jan Feb Mar
Sales
Collections:
1st month
2nd month
3rd month
Total Collections
Purchases
Payments
Receipts
Disbursements
Payment for purchases
Rent
Other expenditures
Tax deposits
Interest on S-T
Total Disbursements
Investment 1,000,000.00
Simple Rate 10.00%
Periods per Year 2
Term (Years) 1
Future Value ($1,102,500.00)
Investment 1,000,000.00
Simple Rate 10.00%
Periods per Year 12
Term (Years) 1
Future Value
Prepare a Monthly amortization schedule for a house loan from pag-ibig given the following data
Method 1 Year-end
Month Interest Principal Principal
0 691,170.65
1 5,759.76 3,374.12 687,796.53
2 5,731.64 3,402.23 684,394.30
3 5,703.29 3,430.59 680,963.72
4 5,674.70 3,459.17 677,504.54
5 5,645.87 3,488.00 674,016.54
6 5,616.80 3,517.07 670,499.48
7 5,587.50 3,546.38 666,953.10
8 5,557.94 3,575.93 663,377.17
9 5,528.14 3,605.73 659,771.44
10 5,498.10 3,635.78 656,135.67
11 5,467.80 3,666.07 652,469.59
12 5,437.25 3,696.62 648,772.97
13 5,406.44 3,727.43 645,045.54
14 5,375.38 3,758.49 641,287.05
15 5,344.06 3,789.81 637,497.24
16 5,312.48 3,821.39 633,675.84
17 5,280.63 3,853.24 629,822.60
18 5,248.52 3,885.35 625,937.25
19 5,216.14 3,917.73 622,019.53
20 5,183.50 3,950.38 618,069.15
21 5,150.58 3,983.29 614,085.86
22 5,117.38 4,016.49 610,069.37
23 5,083.91 4,049.96 606,019.41
24 5,050.16 4,083.71 601,935.70
25 5,016.13 4,117.74 597,817.96
26 4,981.82 4,152.05 593,665.90
27 4,947.22 4,186.66 589,479.25
28 4,912.33 4,221.54 585,257.70
29 4,877.15 4,256.72 581,000.98
30 4,841.67 4,292.20 576,708.78
31 4,805.91 4,327.96 572,380.82
32 4,769.84 4,364.03 568,016.79
33 4,733.47 4,400.40 563,616.39
34 4,696.80 4,437.07 559,179.32
35 4,659.83 4,474.04 554,705.28
36 4,622.54 4,511.33 550,193.95
37 4,584.95 4,548.92 545,645.03
38 4,547.04 4,586.83 541,058.20
39 4,508.82 4,625.05 536,433.15
40 4,470.28 4,663.59 531,769.56
41 4,431.41 4,702.46 527,067.10
42 4,392.23 4,741.65 522,325.45
43 4,352.71 4,781.16 517,544.29
44 4,312.87 4,821.00 512,723.29
45 4,272.69 4,861.18 507,862.11
46 4,232.18 4,901.69 502,960.43
47 4,191.34 4,942.53 498,017.89
48 4,150.15 4,983.72 493,034.17
49 4,108.62 5,025.25 488,008.92
50 4,066.74 5,067.13 482,941.79
51 4,024.51 5,109.36 477,832.43
52 3,981.94 5,151.93 472,680.50
53 3,939.00 5,194.87 467,485.63
54 3,895.71 5,238.16 462,247.47
55 3,852.06 5,281.81 456,965.66
56 3,808.05 5,325.82 451,639.84
57 3,763.67 5,370.21 446,269.63
58 3,718.91 5,414.96 440,854.68
59 3,673.79 5,460.08 435,394.60
60 3,628.29 5,505.58 429,889.01
61 3,582.41 5,551.46 424,337.55
62 3,536.15 5,597.72 418,739.83
63 3,489.50 5,644.37 413,095.45
64 3,442.46 5,691.41 407,404.04
65 3,395.03 5,738.84 401,665.21
66 3,347.21 5,786.66 395,878.55
67 3,298.99 5,834.88 390,043.66
68 3,250.36 5,883.51 384,160.15
69 3,201.33 5,932.54 378,227.62
70 3,151.90 5,981.97 372,245.64
71 3,102.05 6,031.82 366,213.82
72 3,051.78 6,082.09 360,131.73
73 3,001.10 6,132.77 353,998.96
74 2,949.99 6,183.88 347,815.08
75 2,898.46 6,235.41 341,579.67
76 2,846.50 6,287.37 335,292.29
77 2,794.10 6,339.77 328,952.52
78 2,741.27 6,392.60 322,559.92
79 2,688.00 6,445.87 316,114.05
80 2,634.28 6,499.59 309,614.46
81 2,580.12 6,553.75 303,060.71
82 2,525.51 6,608.37 296,452.35
83 2,470.44 6,663.43 289,788.91
84 2,414.91 6,718.96 283,069.95
85 2,358.92 6,774.95 276,295.00
86 2,302.46 6,831.41 269,463.58
87 2,245.53 6,888.34 262,575.24
88 2,188.13 6,945.74 255,629.50
89 2,130.25 7,003.63 248,625.87
90 2,071.88 7,061.99 241,563.88
91 2,013.03 7,120.84 234,443.04
92 1,953.69 7,180.18 227,262.87
93 1,893.86 7,240.01 220,022.85
94 1,833.52 7,300.35 212,722.50
95 1,772.69 7,361.18 205,361.32
96 1,711.34 7,422.53 197,938.79
97 1,649.49 7,484.38 190,454.41
98 1,587.12 7,546.75 182,907.66
99 1,524.23 7,609.64 175,298.02
100 1,460.82 7,673.05 167,624.97
101 1,396.87 7,737.00 159,887.97
102 1,332.40 7,801.47 152,086.50
103 1,267.39 7,866.48 144,220.02
104 1,201.83 7,932.04 136,287.98
105 1,135.73 7,998.14 128,289.84
106 1,069.08 8,064.79 120,225.05
107 1,001.88 8,132.00 112,093.06
108 934.11 8,199.76 103,893.29
109 865.78 8,268.09 95,625.20
110 796.88 8,336.99 87,288.21
111 727.40 8,406.47 78,881.74
112 657.35 8,476.52 70,405.21
113 586.71 8,547.16 61,858.05
114 515.48 8,618.39 53,239.66
115 443.66 8,690.21 44,549.46
116 371.25 8,762.63 35,786.83
117 298.22 8,835.65 26,951.18
118 224.59 8,909.28 18,041.91
119 150.35 8,983.52 9,058.38
120 75.49 9,058.38 0.00
286,750.63 261,281.64
-5,731.64
-3,885.35
-62,769.18
CAPITAL BUDGETING
A company must decide whether to introduce a new product line. The new product w
have startup costs, operational costs, and incoming cash flows over six years. This
project will have an immediate (t=0) cash outflow of 1,000,000 (which include
machinery, and employee training costs). Other cash outflows for years 1–6 are
expected to be 20,000 for the first year, increasing by 2,000 for the next five years .
Cash inflows are expected to be 350,000 for Year 1, followed by 320,000, 350,000,
200,000, 210,000 and 100,000 respectively for the next five years. All cash flows are
after-tax, and there are no cash flows expected after year 6. The required rate of retu
is 10%. Determine the Net Present Value and the Internal rate of return of the projec
NPV 62,574.81
IRR 12.58%
2) NPV vs IRR
b) MIRR
PERIOD
0 (6,260.00)
1 24,248.00
2 24,248.00
3 24,248.00
4 24,248.00
5 42,248.00
IRR 388%
CAGR
MIRR
3) Capital Rationing
Cost IRR
A 74,950 13.00%
B 138,298 11.48%
C 146,661 12.19%
D 189,921 13.82%
E 201,843 11.69%
F 271,477 15.38%
G 396,209 16.16%
H 407,769 16.51%
I 439,207 15.87%
J 445,529 15.02%
t line. The new product will
ws over six years. This
000 (which include
ws for years 1–6 are
for the next five years .
d by 320,000, 350,000,
years. All cash flows are
The required rate of return
te of return of the project.
if positive acceptable
higher than required return-acceptable
preferred:
D
Cash Flow
(12,500)
24,000
25,000
26,000
28,000
30,000
31,000
32,000
34,000
126,094.79
4.97
25,383.24
VERTICAL LOOKUP, HORIZONTAL LOOKUP, INDEX and MATCH
1) Using Vertical Lookup to look for data in a given array
Income is
Greater Than or 0 2,651
Equal To…
4) Comparison of the 3
5) TWO-WAY Lookup
Name Sale
Sanchez 880 Excel built-in function: The SumIF method
Jones 350 1,896
Santos 441
Reyes 280
Aguila 385 The array formula method
Fortes 281 1,896
Jordan 300
Milanes 250
Sanchez 201 Name Sum - Sale
Wong 398 Sanchez 1,896
Evangelista 440 Total Result 1,896
Sanchez 595
Fortes 560
Sanchez 220
2010
Sales
Product 1
NCR 161,000
Calabarzon 198,200
Product X Product X
NCR 35,000 NCR 35,000
Calabarzon 60,000 Calabarzon 60,000
Add this new data into the mix.
Product 2 The array formula handles it.
NCR 160,700 The average function doesn't.
Calabarzon 190,100
Product 3
NCR 153,900
Calabarzon 190,700
Sample:
Washington, Amber Ale: 6,674,005 6,674,005
Exercise 2
STOCK A B C D E F
3-Jan-12 35.3 31.94 22.26 35.7 63.72 13.23
1-Dec-11 37.68 32.06 23.39 36.5 63.42 14.64
1-Nov-11 37.62 30.74 22.38 35.15 60.32 14.18
1-Oct-11 36.19 28.62 22.22 33.92 58.11 13.03
1-Sep-11 33.91 27.52 20.02 33.38 56.07 13.94
2-Aug-11 28.51 26.53 21.25 32.4 57.83 14
1-Jul-11 30.8 27 24.3 32.86 54.73 14.61
1-Jun-11 36.4 25.53 27.51 32.02 55.16 15.43
3-May-11 30.66 25.92 28.45 30.57 55.17 14.64
1-Apr-11 25.26 26.73 25.6 29.42 53.23 15.14
1-Mar-11 24.24 28.05 27.07 29.98 49.97 13.29
2-Feb-11 22.17 27.78 29.06 31.94 53.11 13.47
2-Jan-11 23.49 25.27 30.33 32.83 52.39 14.24
1-Dec-10 22.51 24.38 31.85 30.25 50.67 15.57
3-Nov-10 21.5 25.16 33.33 27.81 48.35 12.85
1-Oct-10 21.85 24.17 32.73 28.14 49.13 11.81
2-Sep-10 17.69 22.76 27.33 28.92 48.34 10.4
1-Aug-10 16.69 21.67 28.4 28.51 48.4 11.16
1-Jul-10 15.56 22.24 24.7 27.42 50.32 10.68
2-Jun-10 16.35 21.33 20.65 27.65 50.23 10.51
1-May-10 14.92 18.11 20.66 27.49 52.8 10.04
1-Apr-10 12.39 16.53 18.24 28.21 54.52 9.85
3-Mar-10 12.01 13.98 16.14 24.42 55.98 7.12
3-Feb-10 10.43 13.16 17.1 23.03 50.74 7.88
2-Jan-10 9.1 13.77 15.51 21.99 51.65 8.63
2-Dec-09 8.18 15.55 15.42 23.14 51.74 8.72
1-Nov-09 9.14 17.88 20.67 25.57 54.93 10.67
1-Oct-09 7.46 17.27 17.11 23.81 56.41 7.93
3-Sep-09 4.78 16.84 13.74 23.25 51.92 9.08
1-Aug-09 5.14 22.65 16.49 28.23 52.14 10.9
1-Jul-09 6.59 23.6 18.56 30.15 50.32 12.48
3-Jun-09 7.38 27.13 18.05 27.2 49.99 14.71
1-May-09 8.01 28.55 27.28 28.98 58.69 16.22
1-Apr-09 7.38 27.08 28.24 29.36 60.88 14.62
1-Mar-09 9.23 26.46 30.02 34.81 61.92 15.06
1-Feb-09 7.23 24.88 28.18 35.83 58.06 13.59
2-Jan-09 8.62 25.91 34.57 34.41 54.66 13.98
3-Dec-08 8.87 25.24 31.03 37.13 56.17 14.26
1-Nov-08 7.78 25.59 32.22 35.5 55.36 17.18
1-Oct-08 5.44 24.62 24.07 33.58 54.87 14.56
4-Sep-08 4.41 25.63 20.15 34.31 52.49 15.59
1-Aug-08 5.93 28.36 27.56 37.55 49.94 17.86
2-Jul-08 8.81 27.52 29.37 39.94 51.09 22.62
1-Jun-08 9.99 25.55 28.82 44.84 47.18 21.8
1-May-08 9.06 28.59 26.61 44.84 45.78 21.63
2-Apr-08 10.09 25.97 30.43 44.41 45.23 26.18
1-Mar-08 7.88 25.07 25.9 38.31 41.01 24.72
1-Feb-08 11.9 27.76 28.12 42.4 45.63 24.45
2-Jan-08 18.66 27.72 36.41 41.92 43.37 24.78
1-Dec-07 15.03 32.11 29.58 43.71 48.93 20.39
1-Nov-07 19.82 30.1 37.45 45.04 46.57 19.79
2-Oct-07 29.32 29.08 44.26 49.81 42.61 22.72
1-Sep-07 45.5 28.32 40.88 52.54 43.45 21.92
1-Aug-07 60.75 28.04 73.64 53.16 42.53 20.79
3-Jul-07 64.35 29.73 65.64 46.87 42.76 22.9
1-Jun-07 61.94 30.9 65.73 47.93 46.81 20.76
1-May-07 56.53 33.6 61.3 47.6 41.12 21.82
3-Apr-07 65.12 35.71 62.32 47.4 37.63 24.6
1-Mar-07 85.69 35.07 64.84 46.91 32.05 20.31
1-Feb-07 79.85 29.79 55.53 39.55 32.84 18.41
26-Jan-07 80.51 35.07 48.59 40.04 38.98 22
Ave Ret
Std Dev
CAGR
Beta
GOAL SEEK
The Goal Seek function causes Excel to change a selected input value in a formula
until the formula produces a desired result. Thus, Goal Seek tells you the value of some
input necessary to reach a given goal.
Project's NPV
Project X Project Y NPV PROFILE
$500
0% $400
Pro
5% $300
ject
10% $200 X
15% $100
20% $0
25%
-$100
-$200
0 0.05 0.1 0.15 0.2 0.25
At what point will we be indifferent to the two projects:
Cost of Capital
NPVX
NPVY
Difference Use GOAL Seek to determine what rate will we
be indifferent to the two options
Pro
ject
X
0.2 0.25
al
OPTIMIZATION USING SOLVER
1)
Blue Ridge Hot Tubs manufactures and sells two models of hot tubs: the Aqua-Spa
and the Hydro-Lux. The owner of the company needs to decide how many of each type
to produce for the next production cycle. Prefabricated fiberglass hot tub shells are bought
from a local supplier and pump and tubing are added to create the hot tubs. (The supplier
has the capacity to deliver as many as the company needs). The same type of pump is installed
into both hot tubs. Each Aqua requires 9 hrs of labor and 12 ft of tubing. Each Hydro requires
6 hrs of labor and 16 ft of tubing. The company expects 1,866 hrs of production labor hours and
2,880 ft of tubing available. A CM of 350 and 300 is earned on each Aqua and Hydro respectively
The company expects to be able to sell all that it produces. There are 300 pumps available.
How many Aqua and Hydro should be produced to maximize profits?
The management of Mexicali needs to determine the investment plan that allows
them to meet the required schedule of payments while placing the least amount
of money in the construction fund.
15,000,000
ompany can
ese investments
months with
an that allows
st amount
n must be
A PRODUCTION AND INVENTORY PLANNING PROBLEM
The AirComp Corporation manufactures heavy duty air compressors for the
home and light industrial markets. Upton is presently trying to plan its
production and inventory levels for the next six months. Because of seasonal
fluctuations in utilityand raw material costs, the per unit cost of producing air
compressors varies from month to month--as does the demand for air
compressors. Production capacity also varies from month to month due to
differences in the number of working days, vacations, and scheduled maintenance
and training. The following table summarizes the monthly production costs,
demands, and production capacity AirComp's management expects to face over
the next six months.
Month
1 2 3 4 5 6
Unit Production Cost 240 250 265 285 280 260
Units Demanded 1,000 4,500 6,000 5,500 3,500 4,000
Maximum Production 4,000 3,500 4,000 4,500 4,000 3,500
There are 2,750 units currently in inventory. The company would like to identify
the production and inventory plan for the next six months that will meet the
expected demand each month while maximizing production and inventory
costs.
aintenance
e to identify
REGRESSION ANALYSIS
Using line Using Trend
Month X Actual Y Predicted Y Predicted Y Forecasted m b
Jan 1 512
Feb 2 743
Mar 3 559
Apr 4 875
May 5 755
Jun 6 890
Jul 7 663
Aug 8 934
Sep 9 1,042
Oct 10 1,102
Nov 11
Dec 12