1.
1. You are an office assistant for the Danbury Drop-In Clinic, a
walk-in healthcare clinic in Danbury, Connecticut. Daniel
Boyette, the owner of the clinic, wants to expand by adding
other clinic locations in Danbury. Whether he leases new space
or merges with another clinic, he needs a loan to cover the cost
of the clinics. He has asked for your help updating the
workbook he created to analyze the loan information and
forecast sales.
Switch to the
Loan Scenarios
worksheet, and then calculate the monthly payment for the Add
1 Location scenario as follows:
a. In cell D10, enter a formula using the
PMT
function to calculate the monthly payment for a loan.
b. Use the inputs listed under the Add 1 Location loan scenario
in cells
D4
,
D6
, and
D8
. (
Hint
: The result will be displayed as a negative number to reflect the
negative cash flow of a loan payment.)
2. Calculate the monthly interest rate for the Add 2 Locations
scenario as follows:

2.
a. In cell E6, enter a formula using the
RATE
function to calculate the monthly interest rate for a loan.
b. Use the inputs listed under the Add 2 Locations loan scenario
in cells
E8
,
E10
, and
E4
. (
Hint
: Assume the present value of the loan is the loan amount shown
in cell E4.)
3. Calculate the loan amount for the Add 3 Locations scenario
as follows:
a. In cell F4, enter a formula using the
PV
function to calculate the loan amount.
b. Use the inputs listed under the Add 3 Locations loan scenario
in cells
F6
,
F8
, and
F10
.
4. Calculate the number of months Daniel needs to pay back a
loan for an existing clinic as follows:
a. In cell G8, enter a formula using the

3.
NPER
function to calculate how many months it would take to pay
back a $450,000 loan.
b. Use the inputs listed under the Merger loan scenario in cells
G6
,
G10
, and
G4
.
5. Switch to the
Amortization
worksheet. Calculate the cumulative interest for a loan for one
new clinic location as follows:
a. In cell C16, enter a formula using the
CUMIPMT
function to calculate the cumulative interest paid on the loan
after the first year (payment 1 in cell
C14
through payment 12 in cell
C15
) when the payments are made at the end of the period. Use
0
as the type argument in your formula.
b. Use absolute references for the rate, nper, and pv arguments.
c. Use relative references for the start and end arguments.
d. Copy the formula from cell C16 to the range D16:G16 to
calculate the interest paid in Years 2–5.
6. Calculate the cumulative principal for a loan for one new

4.
clinic location as follows:
a. In cell C17, enter a formula using the
CUMPRINC
function to calculate the cumulative principal paid in the first
year (payment 1 in cell
C14
through payment 12 in cell
C15
) when the payments are made at the end of the period. Use
0
as the type argument in your formula.
b. Use absolute references for the rate, nper, and pv arguments.
c. Use relative references for the start and end arguments.
d. Copy the formula from cell C17 to the range D17:G17 to
calculate the principal paid in Years 2–5.
7. In cell H17, use the
Error Checking
command to identify the error in the cell, and then correct the
error. (
Hint
: The formula in the cell should calculate the total values in
C17:G17 using the SUM function.)
8. Calculate the principal amounts in the loan amortization
schedule as follows:
a. In cell E22, enter a formula using the
PPMT
function to determine the amount of the first loan payment
devoted to principal.

5.
b. Use absolute references only for the rate, nper, and pv
arguments.
c. Use cell
A22
as the current period.
(Hint
: The period is based on a monthly payment schedule.)
d. Copy the formula from cell E22 to the range E23:E81 to
calculate the principal paid in Periods 2–60.
9. Calculate the interest amounts in the loan amortization
schedule as follows:
a. In cell F22, enter a formula using the
IPMT
function to determine the amount of the first loan payment
devoted to interest.
b. Use absolute references only for the rate, nper, and pv
arguments.
c. Use cell
A22
as the current period.
(Hint
: The period is based on a monthly payment schedule.)
d. Copy the formula from cell F22 to range F23:F81 to calculate
the principal paid in Periods 2–60.
10. Switch to the
Depreciation
worksheet. Calculate the annual straight-line depreciation for
one new clinic location (the most likely scenario) as follows:

6.
a. In cell C10, enter a formula using the
SLN
function to calculate the straight-line depreciation for the clinic
during its first year of operation.
b. Use the values in cells
D4
,
D5
, and
D6
for the arguments.
c. Use absolute references for the cost, salvage, and life
arguments in the SLN formula.
d. Copy the formula from cell C10 to the range D10:I10 to
calculate the yearly straight-line depreciation in Years 2–7.
11. Calculate the annual declining balance depreciation for one
new clinic location as follows:
a. In cell C17, enter a formula using the
DB
function to calculate the declining balance depreciation for the
new clinic during its first year of operation.
b. Use the values in cells
D4
,
D5
, and
D6
for the arguments.

7.
c. Use the value in cell
C16
as the current period.
d. Use absolute references only for the cost, salvage, and life
arguments in the DB formula.
e. Copy the formula from cell C17 to the range D17:I17 to
calculate the yearly declining balance depreciation in Years 2–
7.
12. Correct the errors on the
Depreciation
worksheet as follows:
a. Determine the error in cell D18 by using the Trace Precedent
and Trace Dependent arrows. Correct the error so that the
formula in cell D18 calculates the cumulative depreciation of
the clinic by adding the Cumulative Depreciation value in Year
1 to the Yearly Depreciation value in Year 2.
b. Copy the corrected formula in cell D18 to the range E18:I18,
and then remove any arrows from the worksheet.
13. Switch to the
Income Statement
worksheet. For the Add 1 Location scenario, project the income
from Insurance for 2020-2022 (cells D4:F4) using a Growth
Trend interpolation. (
Hint
: Select the range C4:G4 before filling this series with values.)
14. Project the income from Other reimbursements for 2020-
2022 (cells D6:F6) using a Linear Trend interpolation. (
Hint
: Select the range C6:G6 before filling this series with values.)

8.
15. Project expenses as follows:
a. Project the expenses for Payroll for 2020-2023 (cells
D12:G12) using a Growth trend extrapolation.
b. Use a step value of
1.05
. (
Hint
: When extrapolating values, the Trend check box in the Series
Dialog Box should not be checked.)
c. Do not set a stop value for the series. (
Hint
: Select the range C12:G12 before filling this series with
values.)
16. Switch to the
Investment
worksheet. Calculate the present value of an investment in one
new clinic location as follows:
a. In cell C14, enter a formula that uses the
NPV
function to calculate the Present Value of the Add 1 Location
investment.
b. Use the value in cell
C13
as the desired rate of return.
c. Use the range
C6:C11
as the returns paid to investors. (
Hint

9.
: If a Formula Omits Adjacent Cell error warning appears,
ignore it.)
17. In cell C15, enter a formula without using a function that
calculates the Net Present Value by adding the Present Value of
the Add 1 Location investment (calculated in cell
C14
) to the value of the initial investment (in cell
C5
).
18. Calculate the internal rate of return as follows:
a. In cell C16, enter a formula that uses the
IRR
function to calculate the internal rate of return of the Add 1
Location investment.
b. Use the range
C5:C11
as the returns paid to investors.
Your workbook should look like the Final Figures on the
following pages. Save your changes, close the workbook, and
then exit Excel. Follow the directions on the SAM website to
submit your completed project.
Final Figure 1: Loan Scenarios Worksheet