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Advanced_Excel_2019_PC-3-5-5-a

The document outlines a What-If Analysis involving three inflation scenarios affecting house prices and interest rates. It includes instructions for using Goal Seek to determine borrowing capacity based on monthly repayments, creating a two-input data table for borrowing costs, and utilizing the Solver add-in to maximize income from course sales. Additionally, it provides a summary of results for each scenario and the associated financial implications.

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16 views

Advanced_Excel_2019_PC-3-5-5-a

The document outlines a What-If Analysis involving three inflation scenarios affecting house prices and interest rates. It includes instructions for using Goal Seek to determine borrowing capacity based on monthly repayments, creating a two-input data table for borrowing costs, and utilizing the Solver add-in to maximize income from course sales. Additionally, it provides a summary of results for each scenario and the associated financial implications.

Uploaded by

SyahrizalYusoff
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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What-If Analysis

Set up 3 scenarios. The assumption is that if house price inflation is high, interest rates
will also be high, so include the folllowing in the scenarios:

High inflation: Interest rate 9%, House cost 250,000


1 Medium inflation: Interest rate7%, House cost 225,000
Low inflation: Interest rate 5%, House cost 180,000

Show each scenario in turn and then produce a summary report and a summary
PivotTable.

Use Goal Seek to find how much you could afford to borrow if you could afford to
2
repay 1,100 a month

Create a two-input data table to show the cost of borrowing from 100,000 to 200,000
3
in 10,000 increments at interest rates from 5% to 10% in 1% increments.

Use the Solver add-in to find which combination of major and standard courses
generates the most income subject to being able to sell a limited number of each type
4
of course, an overall maximum number of courses that can be marketed in the period
and having to complete whole courses.
Annual Interest Rate 7%
Period in years 25
Capital amount 200000
Monthly repayment -£1,413.56
Authors 8
Hours in day 8
Start date 8/1/2013
End date 9/30/2013
Available working days 43
Hours available 2752

Hours to write major course 500


Hours to write standard course 200

Income per major course 30


Income per standard course 10

Maximum sales of major course 1500


Maximum sales of standard course 2000

Major courses produced 2


Standard courses produced 2
Hours required 1400
Total number of courses 4
Maximum number of courses 10

Income major courses 90000


Income standard courses 40000
Total 130000
What-If Analysis

3
4
What-If Analysis

Set up 3 scenarios. The assumption is that if house price inflation is high, interest rates will also be high, so
include the folllowing in the scenarios:

High inflation: Interest rate 9%, House cost 250,000


Medium inflation: Interest rate7%, House cost 225,000
Low inflation: Interest rate 5%, House cost 180,000

Show each scenario in turn and then produce a summary report and a summary PivotTable.

Use the DATA ribbon tab, Data Tools, Scenario Manager. Set the Changing Cells to E9 and E11 and Add
three scenarios. Select each in turn and use the Show button to change the cells to your Scenario values.
Use the Summary button to generate each report in turn--they should look similar to our example sheets.

Use Goal Seek to find how much you could afford to borrow if you could afford to repay 1,100 a month.

Select cell E11 and go to the DATA ribbon tab, Data Tools, What-If Analysis and choose Goal Seek. Set Set
Cell to E12, To value to -1200 and By changing cell: to E11.

Create a two-input data table to show the cost of borrowing from 100,000 to 200,000 in 10,000
increments at interest rates from 5% to 10% in 1% increments.

Enter the values as shown in the worked answer below in D15:D25 and E14:J25 enter =E12 in cell D14.
Select D14:J25 and use the DATA ribbon tab, Data Tools, Data Table. Set the Row input cell: to E9 and
the Column input cell: to E11.
Use the Solver add-in to find which combination of major and standard courses generates the most
income subject to being able to sell a limited number of each type of course, an overall maximum number
of courses that can be marketed in the period and having to complete whole courses.

You might need to go to FILE, Options, Add-Ins to install the Solver add-in before setting the values as
shown in C6:
Click the plus sign above to
display exercise help
Annual Interest Rate 9%
Period in years 25
Capital amount 250000
Monthly repayment -£2,097.99

-£2,097.99 5% 6% 7% 8% 9%
100000 (584.59) (644.30) (706.78) (771.82) (839.20)
110000 (643.05) (708.73) (777.46) (849.00) (923.12)
120000 (701.51) (773.16) (848.14) (926.18) (1,007.04)
130000 (759.97) (837.59) (918.81) (1,003.36) (1,090.96)
140000 (818.43) (902.02) (989.49) (1,080.54) (1,174.87)
150000 (876.89) (966.45) (1,060.17) (1,157.72) (1,258.79)
160000 (935.34) (1,030.88) (1,130.85) (1,234.91) (1,342.71)
170000 (993.80) (1,095.31) (1,201.52) (1,312.09) (1,426.63)
180000 (1,052.26) (1,159.74) (1,272.20) (1,389.27) (1,510.55)
190000 (1,110.72) (1,224.17) (1,342.88) (1,466.45) (1,594.47)
200000 (1,169.18) (1,288.60) (1,413.56) (1,543.63) (1,678.39)
10%
(908.70)
(999.57)
(1,090.44)
(1,181.31)
(1,272.18)
(1,363.05)
(1,453.92)
(1,544.79)
(1,635.66)
(1,726.53)
(1,817.40)
Scenario Summary
Current Values: High inflation Medium inflation Low inflation
Changing Cells:
$E$9 9% 9% 7% 5%
$E$11 250000 250000 225000 180000
Result Cells:
$E$12 -£2,097.99 -£2,097.99 -£1,590.25 -£1,052.26
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created. Changing cells for each
scenario are highlighted in gray.
$E$9,$E$11 by (All)

Row Labels $E$12


High inflation -2097.9909091
Low inflation -1052.2620747
Medium inflation -1590.2531939

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