1.

Create an excel data of Product and Price (5 products minimum) and their graphical representation in a
chart
2. Perform a goal seek and 3 scenario analysis for data of your choice (under what if analysis)

3. Demonstrate the usage of VLookup, HLookup, Match,Index with examples

7. Create a pivot table for the data of your choice (you can use the sample data for guidance)

Part B

Consider the following situation : A loan with monthly payments, an annual interest rate of 6%, a 20-year
duration, a present value of $150,000 (amount borrowed) and a future value of 0 (that's what you hope to
achieve when you pay off a loan). We make monthly payments, so we use 6%/12 = 0.5% for Rate and
20*12 = 240 for Nper (total number of periods). If we make annual payments on the same loan, we use 6%
for Rate and 20 for Nper.

Now find out the amount to be paid as monthly installments (PMT). Also, given PMT and others, find out
the rate of interest per month (Rate). Similarly, find out Nper, PV and FV given other parameters.

Fred Flint owns 1000 shares in the Bedrock Company. The shares are currently worth £2.80
each. Fred is considering whether to
(i) hold the shares for one year and then sell, or
(ii) sell the shares now and buy stock at £80 per stock in the MightyBig Corporation.

He estimates that the price of the MightyBig stock in a year’s time will be £87, £80, or £70 with
probabilities of 0.5, 0.3, and 0.2 respectively. At the end of one year, Bedrock’s share price and
dividend depend upon Table below
 Use Excel to draw a decision tree for Fred Flint’s investment problem, and hence determine his
best policy.

1. Barney’s cousin, Bette Briggs, has been impressed by his bank’s portfolio management and has
decided to avail herself of their expertise. Bette has informed the bank that she wants a return
of 13% on her investment and she has been given details of three stocks X, Y and Z with average
annual returns of 13.2%, 17.5%, and 9.7% respectively. Statistical information on these stocks is
as follows: variances for X, Y, Z are 0.0012, 0.0023, and 0.00047, while covariances are XY = –
0.00019, XZ = 0.0009, and YZ = 0.000125. Using the investment model for Barney Briggs’s
portfolio, find the percentage investments for X, Y and Z that will give Bette an overall return of
13%.

2. A company is considering the following five investment proposals for acceptance. The capital
required for each project over the next five years is shown in Table 3.10, along with the amount
of budgeted capital. Management wants to maximise the rate of return, i.e., maximise the total
NPV of the selected proposals. Using Excel’s linear programming tool – Solver – find the optimal
set of investments and the resulting NPV of the investments

3. The Interstate Bank is planning its funds portfolio for next year. The bank has £20 million to
invest and is considering five different funds as shown in Table 3.11. All of the funds are secured
except the signature loans
 Interstate wants to maximise the return on its investment portfolio while complying with the
following banking regulations:
 Signature loans may not exceed 10% of total loans.
 Home improvement loans may not exceed 50% of total secured loans.
 Signature loans cannot exceed the investment in government securities.
 Government securities cannot exceed 40% of the total investment.

Solve the Interstate Bank’s problem by linear programming methods using Excel’s Solver.

1. The MightyBig Company is considering three sites for the location of its new manufacturing
plant. Annual estimated revenue along with fixed and variable costs for each site are shown in
Table below

Sales volume is expected to be 30,000 units per year. Set up a cost-volume-profit model and
hence find the best location using break-even analysis.

2. A hospital has a permanent need for a piece of theatre equipment costing £48,000. The fixed
annual running cost is £2000 and maintenance charges are estimated at £3000 in the first year,
rising annually at a rate of 15% thereafter. The equipment’s useful life is eight years and
 equipment cost is written off on a straight-line depreciation basis. If the cost of capital is
calculated to be 10%, when is the best time to replace the equipment, and what is the annual
equivalent cost? Would the answer change if the equipment’s life was extended to 12 years,
given that depreciation is zero over this extended period?

3. Sharon Smith is sales manager of the KleenUp Company. Sharon intends to launch a monthly
sales campaign during the coming year. She is currently preparing a budget for the labour costs
required to handle the sales campaigns and has estimated that the first one will require 100
hours at a cost of £15 per hour. From previous experience, Sharon knows that the salesforce’s
learning experience follows a 78% learning curve. The KleenUp Company would like to know
what the first four campaigns will cost

4. The Things A’Plenty Company has recently received several orders for its new solar-assisted car.
The number of customer orders for the next five months are 2, 6, 10, 10, and 15 respectively.
The first three cars have already been manufactured and their production times have been
found to be 500, 400, and 350 hours respectively. Having studied these times, the Company’s
engineers estimate that an 80% improvement in production time can be achieved. Things
A’Plenty would like to know how much labour is required to meet its commitments to
customers. The company has asked its engineers to draw up a table of monthly labour
requirements. Company data shows that an employee works twenty 8-hour days each month,
i.e., 160 labour-hours per month. If production-time data for the next three units is found to be
320, 298, and 280 respectively, use the model of Figure 5.16 to check out the accuracy of the
Company’s assumption of an 80% learning curve.

The KleenUp Company has decided to do an analysis on the operating costs of its fleet of cars. It has
taken a random sample of 12 cars which can be divided into three types. The operating costs of its fleet
of cars in pence per mile is given below :

Type1 Type 2 Type3

Perform an analysis of variance on the above data using Excel’s Anova function – take a significance level
of 1%. Does the table’s data provide any evidence that the operating costs per mile for the three types
of cars are different?
MeadowSweet Creameries sells 10-litre catering containers of milk for £4 each. Because of the recent
problems with the filling machine, the amount of milk in each container varies from the 10-litre mean.
The volumes are normally distributed with a standard deviation of 0.2 litres. Having reassured
customers that only one in every hundred containers will contain less than 10 litres, MeadowSweet
must now find the average container volume that will satisfy this guarantee. Furthermore, the company
has an option of purchasing a new part for the filling machine that would reduce the standard deviation
to 0.15 litres. MeadowSweet is undecided whether this new component, costing £5000, is worthwhile
since it lasts for only 100,000 container fillings. The company has asked its production manager Willie
Wong for advice on both problems.

(Hint: use the NORMINV function – see end-of-chapter functions for NORMINV details.)