1-Base-CaseTool KitChapter 1111/21/18Note: Calculations are automatic, including for tables. This will make the calculations take longer to complete. You can disable automatic calculations for tables by following the steps shown here.Cash Flow Estimation and Risk AnalysisWorksheet 1-Base-CaseThis worksheet contains the base-case model. It calculates an expansion project's cash flows and performance measures using base-case, or most likely, values for the input variables. It also includes the basic analysis but with straight-line depreciation and bonus depreciation.Go to the menu "Files" at the top left of the menu bar.Select "Options" from the items in the first column.This will give you the screen shown below:The second worksheet (2-Sens) extends the basic model to include sensitivity analysis using Data Tables (we include a brief tutorial on the use of Data Tables). Worksheet 2-Sens also illustrates special cases of sensitivity analysis, including breakeven analysis, one-way data tables with multiple outputs, and two-way data tables.Worksheet 3a-Sens extends the basic model to include scenario analysis. Worksheet 3b-ScenMgr shows how to use Excel's Scenario Manager for scenario analysis.Worksheet 4-Sim extends the basic model to include simulation analysis. Worksheet 5-Replmt illustrates the analysis for a proposed cost-reducing replacement investment. Replacement decisions differ from expansion decisions because most of the cash flows are found by subtracting the old project's cash flows from those of the new project to calculate incremental cash flows for use in the analysis.Worksheet 6-DecTree extends the scenario analysis to examine two decision trees in which the decision is made in stages. The first one simply shows the situation where the firm can abandon the project if things are not working out and cash flows are negative. The second one involves a marketing study and a prototype of the final product designed to learn more about demand before deciding to go into full production.Worksheet Appendix 11-A provides depreciation tables as described in Appendix A of the textbook. It also shows examples using straight-line depreciation and bonus depreciation.11-1 Identifying Relevant Cash FlowsA proposal’s relevant project cash flows are the differences between the cash flows the firm will have if it implements the project versus the cash flows it will have if it rejects the project. These are called incremental cash flows.Choose "Formulas" in the first column.11-2 Analysis of an Expansion ProjectThis will give you the screen shown below.The figure below shows the inputs and key results of Project L (one of the projects whose cash flows are used in the previous chapter); the actual analysis is conducted further below in the worksheet. The values in the Inputs section are linked to the model, as are the values shown in Key Results. If you change any of the values in the Input Section, the model recalculate almost instantly, causing ch ...
Compute IRR and NPV in Microsoft Excel 1.IRR Function .docxmccormicknadine86
Compute IRR and NPV in Microsoft Excel
1.IRR Function
Description:
The Microsoft Excel IRR function returns the internal rate of return for a series of cash flows. The cash
flows must occur at regular intervals, but do not have to be the same amounts for each interval.
Syntax
The syntax for the IRR function in Microsoft Excel is:
IRR(range, [estimated_irr] )
Parameters or Arguments
range
A range of cells that represent the series of cash flows.
estimated_irr
Optional. It is your guess at the internal rate of return. If this parameter is omitted, it
assumes an estimated_irr of 0.1 or 10%
Example (as Worksheet Function)
Let's look at some Excel IRR function examples and explore how to use the IRR function as a
worksheet function in Microsoft Excel:
Based on the Excel spreadsheet above:
This first example returns an internal rate of return of 28%. It assumes that you start a
business at a cost of $7,500. You net the following income for the first four years: $3,000,
$5,000, $1,200, and $4,000.
This next example returns an internal rate of return of 5%. It assumes that you start a
business at a cost of $10,000. You net the following income for the first three years: $3,400,
$6,500, and $1,000.
=IRR(B1:B4)
Result: 5%
2.NPV Function
Description
The Microsoft Excel NPV function returns the net present value of an investment.
Syntax
The syntax for the NPV function in Microsoft Excel is:
NPV( discount_rate, value1, [value2, ... value_n] )
Parameters or Arguments
discount_rate
The discount rate for the period.
value1, value2, ... value_n
The future payments and income for the investment (ie: cash flows). There can be up
to 29 values entered.
Note
Microsoft Excel's NPV function does not account for the intial cash outlay, or may account for
it improperly depending on the version of Excel. However, there is a workaround.
This workaround requires that you NOT include the initial investment in the future
payments/income for the investment (ie: value1, value2, ... value_n), but instead, you need to
subtract from the result of the NPV function, the amount of the initial investment.
The workaround formula is also different depending on whether the cash flows occur at the
end of the period (EOP) or at the beginning of the period (BOP).
If the cash flows occur at the end of the period (EOP), you would use the following formula:
=NPV( discount_rate, value1, value2, ... value_n ) - Initial Investment
If the cash flows occur at the beginning of the period (BOP), ou would use the following
formula:
=NPV( discount_rate, value2, ... value_n ) - Initial Investment + value1
Example (as Worksheet Function)
Let's look at some NPV examples and explore how to use the NPV function as a worksheet
function in Microsoft Excel:
This first example returns a net present value of $3,457.19. It assumes that you pay $7,500
as an initial investment . You then receive the following in ...
Compute IRR and NPV in Microsoft Excel 1.IRR Function .docxpatricke8
Compute IRR and NPV in Microsoft Excel
1.IRR Function
Description:
The Microsoft Excel IRR function returns the internal rate of return for a series of cash flows. The cash
flows must occur at regular intervals, but do not have to be the same amounts for each interval.
Syntax
The syntax for the IRR function in Microsoft Excel is:
IRR(range, [estimated_irr] )
Parameters or Arguments
range
A range of cells that represent the series of cash flows.
estimated_irr
Optional. It is your guess at the internal rate of return. If this parameter is omitted, it
assumes an estimated_irr of 0.1 or 10%
Example (as Worksheet Function)
Let's look at some Excel IRR function examples and explore how to use the IRR function as a
worksheet function in Microsoft Excel:
Based on the Excel spreadsheet above:
This first example returns an internal rate of return of 28%. It assumes that you start a
business at a cost of $7,500. You net the following income for the first four years: $3,000,
$5,000, $1,200, and $4,000.
This next example returns an internal rate of return of 5%. It assumes that you start a
business at a cost of $10,000. You net the following income for the first three years: $3,400,
$6,500, and $1,000.
=IRR(B1:B4)
Result: 5%
2.NPV Function
Description
The Microsoft Excel NPV function returns the net present value of an investment.
Syntax
The syntax for the NPV function in Microsoft Excel is:
NPV( discount_rate, value1, [value2, ... value_n] )
Parameters or Arguments
discount_rate
The discount rate for the period.
value1, value2, ... value_n
The future payments and income for the investment (ie: cash flows). There can be up
to 29 values entered.
Note
Microsoft Excel's NPV function does not account for the intial cash outlay, or may account for
it improperly depending on the version of Excel. However, there is a workaround.
This workaround requires that you NOT include the initial investment in the future
payments/income for the investment (ie: value1, value2, ... value_n), but instead, you need to
subtract from the result of the NPV function, the amount of the initial investment.
The workaround formula is also different depending on whether the cash flows occur at the
end of the period (EOP) or at the beginning of the period (BOP).
If the cash flows occur at the end of the period (EOP), you would use the following formula:
=NPV( discount_rate, value1, value2, ... value_n ) - Initial Investment
If the cash flows occur at the beginning of the period (BOP), ou would use the following
formula:
=NPV( discount_rate, value2, ... value_n ) - Initial Investment + value1
Example (as Worksheet Function)
Let's look at some NPV examples and explore how to use the NPV function as a worksheet
function in Microsoft Excel:
This first example returns a net present value of $3,457.19. It assumes that you pay $7,500
as an initial investment . You then receive the following in.
ChapterTool KitChapter 10112018 The Basics of Capital BudgetingJinElias52
ChapterTool KitChapter 1011/20/18 The Basics of Capital Budgeting: Evaluating Cash Flows10-1 An Overview of Capital BudgetingCapital budgeting is the process of analyzing projects and deciding which ones to accept.10-2 The First Step in Project AnalysisThe capital budgeting process begins with estimating a project's expected cash flows. We explain this in the next chapter.The next step is to put the estimated cash flows and other inputs (primarily the project's cost of capital) on a time line, as shown below. The figure below also reports evaluation measures, which we explain in the next sections.Figure 10-1Cash Flows and Selected Evaluation Measures for Projects S and L (Millions of Dollars)Panel A: Inputs for Project Cash Flows and Cost of Capital, rINPUTS:r =10%Initial Cost and Expected Cash FlowsYear01234Project S−$10,000$5,300$4,300$1,874$1,500Project L−$10,000$1,600$2,364$2,469$8,400Panel B: Summary of Selected Evaluation MeasuresProject SProject LNet present value, NPV$804.38$1,000.57Internal rate of return, IRR14.7%13.5%Modified IRR, MIRR12.1%12.7%Profitability index, PI1.081.10Payback2.213.42Discounted payback3.213.83Note: Numbers in the figure are shown as rounded values for clarity in reporting. However unrounded values are used for all calculations.10-3 Net Present Value (NPV)To calculate the NPV, we find the present value of the individual cash flows and then sum those discounted cash flows. The sum is the value the project adds to or subtracts from shareholder wealth.Figure 10-2Finding the NPV for Projects S and L (Millions of Dollars)INPUTS:r =10%Initial Cost and Expected Cash FlowsYear01234Project S−$10,000$5,300$4,300$1,874$1,5004,818←← ↵ ↓ ↓ ↓3,554← ← ← ← ← ← ←← ↵ ↓ ↓1,408← ← ← ← ← ← ← ← ← ← ← ← ←← ↵ ↓1,025← ← ← ← ← ← ← ← ← ← ← ← ← ← ← ← ← ← ←← ↵NPVS = $804Long way:
Sum the PVs of the CFs to find NPVInitial Cost and Expected Cash FlowsYear01234Project L−$10,000$1,600$2,364$2,469$8,400NPVL = $1,001Short way: Use Excel's NPV function.
=NPV(B47,C59:F59)+B59Note: Numbers in the figure are shown as rounded values for clarity in reporting. However unrounded values are used for all calculations.10-4 Internal Rate of Return (IRR)The internal rate of return is defined as the discount rate that equates the present value of a project's cash inflows to its outflows. In other words, the internal rate of return is the interest rate that forces NPV to zero. The calculation for IRR can be tedious, but Excel provides an IRR function that merely requires you to access the function and enter the array of cash flows. The IRRs for Project S and L are shown below, along with the data entry for Project S.Figure 10-3Finding the IRR for Projects S and L (Millions of Dollars)INPUTS:Initial Cost and Expected Cash FlowsYear01234Project S−$10,000$5,300$4,300$1,874$1,5004,621.33←← ↵ ↓ ↓ ↓3,269.26← ← ← ← ← ← ...
Capital Expense PowerPoint Presentation SlidesSlideTeam
This complete deck is oriented to make sure you do not lag in your presentations. Our creatively crafted slides come with apt research and planning. This exclusive deck with twenty two slides is here to help you to strategize, plan, analyse, or segment the topic with clear understanding and apprehension. Utilize ready to use presentation slides on Capital Expense PowerPoint Presentation Slides with all sorts of editable templates, charts and graphs, overviews, analysis templates. It is usable for marking important decisions and covering critical issues. Display and present all possible kinds of underlying nuances, progress factors for an all inclusive presentation for the teams. This presentation deck can be used by all professionals, managers, individuals, internal external teams involved in any company organization. http://bit.ly/2Skys9T
ChapterTool KitChapter 1212912Corporate Valuation and Financial .docxmccormicknadine86
ChapterTool KitChapter 1212/9/12Corporate Valuation and Financial Planning12-2 Financial Planning at MicroDrive, Inc.The process used by MicroDrive to forecast the free cash flows from its operating plan is described in the sections below.Setting Up the Model to Forecast OperationsWe begin with MicroDrive's most recent financial statements and selected additional data.Figure 12-1 MicroDrive’s Most Recent Financial Statements (Millions, Except for Per Share Data)INCOME STATEMENTSBALANCE SHEETS20122013Assets20122013Net sales$ 4,760$ 5,000Cash$ 60$ 50COGS (excl. depr.)3,5603,800ST Investments40-Depreciation170200Accounts receivable380500Other operating expenses480500Inventories8201,000EBIT$ 550$ 500Total CA$ 1,300$ 1,550Interest expense100120Net PP&E1,7002,000Pre-tax earnings$ 450$ 380Total assets$ 3,000$ 3,550Taxes (40%)180152NI before pref. div.$ 270$ 228Liabilities and equityPreferred div.88Accounts payable$ 190$ 200Net income$ 262$ 220Accruals280300Notes payable130280Other DataTotal CL$ 600$ 780Common dividends$48$50Long-term bonds1,0001,200Addition to RE$214$170Total liabilities$ 1,600$ 1,980Tax rate40%40%Preferred stock100100Shares of common stock5050Common stock500500Earnings per share$5.24$4.40Retained earnings800970Dividends per share$0.96$1.00Total common equity$ 1,300$ 1,470Price per share$40.00$27.00Total liabs. & equity$ 3,000$ 3,550The figure below shows all the inputs required to project the financial statements for the scenario that has been selected with the Scenario Manager: Data, What-If Analysis, Scenario Manager. There are two scenarios. The first is named Status Quo because all operating ratios except the sales growth rate are assumed to remain unchanged. The initial sales growth rate was chosen by MicroDrive's managers based on the existing product lines. The growth rate declines over time until it eventually levels off at a sustainable rate. The other scenario is named Final because it is the set of inputs chosen by MicroDrive's management team.Section 1 shows the inputs required to estimate the items in an operating plan. For each of these inputs, Section 1 shows the industry averages, the actual values for the past two years for MicroDrive, and the forecasted values for the next five years. The managers assumed the inputs for future years (except the sales growth rate) would be equal to the inputs in the first projected year.MicroDrive's managers assume that sales will eventually level off at a sustaniable constant rate.Sections 2 and 3 show the data required to estimate the weighted average cost of capital. Section 4 shows the forecasted growth rate in dividends.Note: These inputs are linked throughout the model. If you want to change an input, do it here and not other places in the model.Figure 12-2MicroDrive's Forecast: Inputs for the Selected ScenarioStatus QuoIndustryMicroDriveMicroDriveInputsActualActualForecast1. Operating Ratios2013201220132014201520162017201 ...
More Information:
https://flevy.com/browse/business-document/business-case-template-excel-683
DOCUMENT DESCRIPTION
For individuals who are fairly new at developing business cases, the Business Case Template Excel file provides a step-by-step methodology for developing a high level business case.
This Template Excel is also a companion document of the "How to Develop a Business Case" presentation which guide business leaders make investment decisions by helping them understand the financial impact of those decisions throughout the planning stage of a project to help justify a strategic direction and operating strategy
This Excel template includes the following sections:
- Instruction Guide
- Step 1. Input Variables
- Step 2. Generate Baseline Data
- Step 3. Input Benefit Estimate
- Step 4. Review Benefit Calc
- Step 5. Enter Investment
- Step 6. Review Cap Ex
- Step 7. Review Cash Flow Result
- Step 8. What-If Analysis
- Financial Summary
- Example Charts
Got a question about the product? Email us at support@flevy.com or ask the author directly by using the form to the right. If you cannot view the preview above this document description, go here to view the large preview instead.
CASE17CASE 19 Instructor VersionCopyright 2014 Health .docxwendolynhalbert
CASE17CASE 19 Instructor VersionCopyright 2014 Health Administration Press11/26/14 RN TEMPS, INC. Capital Structure AnalysisThis case illustrates the capital structure decision for a firm that begins with zero debtfinancing.The spreadsheet consists of two separate models: 1) Debt amount and ROE (Rows 35-43) uses income statements to examine the effects of financial leverage on ROE. This model uses a single (constant) interest rate input for all capital structure scenarios.2) Debt amount and Stock Price / CCC (Rows 45-56) examines the effects of debt financing on firm value, cost of capital, and stock price, assuming zero growth (perpetual cash flows.)The model consists of a complete base case analysis--no changes need to be madeto the existing MODEL-GENERATED DATA section. However, all values in the INPUT DATAsection of the student version have been replaced with zeros. Thus, students must determinethe appropriate input values and enter them into the model. These cells are colored red.When this is done, any error cells will be corrected and the base case solution will appear.Note that the model does not contain any risk analyses, so students will have to createtheir own if required by the case. Furthermore, students must create their own graphics(charts) as needed to present their results.The instructor version of the model contains a sheet (Figure 1) that plots both stock priceand cost of capital versus the dollar amount of debt financing. It also contains sheets thatcontain the inputs and outputs for the increased and decreased business risk scenarios.INPUT DATA: KEY OUTPUT:Tax rate40.0% Debt Amount and ROE Input:Debt Amount and ROE Analysis:Market value$12,000,000ExpectedCost of debt10.0%ROESD of ROEAll Equity15.0%1.8%ProbabilityEBIT25% Debt18.0%2.4%0.25$2,500,00050% Debt24.0%3.5%0.5$3,000,00075% Debt42.0%7.1%0.25$3,500,000 Debt Amount and Stock Price / CCC Input:Debt Amount and Stock Price / CCC Analysis:EBIT$3,000,000No. of shares 10,000,000Debt AmountCost of DebtCost of EquityDebt AmountStock PriceCCC $00.0%15.0%$0$1.20015.0%2,500,00010.0%15.5%2,500,000$1.31513.7%5,000,00011.0%16.5%5,000,000$1.39112.9%7,500,00013.0%18.0%7,500,000$1.42512.6%10,000,00016.0%20.0%10,000,000$1.42012.7%12,500,00020.0%25.0%12,500,000$1.37013.1%MODEL-GENERATED DATA: Debt and ROE Analysis: All Equity 25% DebtProbability0.250.500.250.250.500.25EBIT$2,500,000$3,000,000$3,500,000$2,500,000$3,000,000$3,500,000Interest000300,000300,000300,000 EBT$2,500,000$3,000,000$3,500,000$2,200,000$2,700,000$3,200,000Taxes1,000,0001,200,0001,400,000880,0001,080,0001,280,000Net Income$1,500,000$1,800,000$2,100,000$1,320,000$1,620,000$1,920,000ROE12.5%15.0%17.5%14.7%18.0%21.3%TIE Ration.a.n.a.n.a.8.3310.0011.67E(ROE)15.0%18.0%Std dev of ROE1.8%2.4%Coefficient of variation0.120.13 50% Debt 75% DebtProbability0.250.500.250.250.500.25EBIT$2,500,000$3,000,000$3,500,000$2,500,000$3,000,000$3, ...
Monte Carl Simulation is a powerful and effective tool when used properly helps to navigate the expected Net Present Value NPV. This presentation helps to improve the pattern to ackowlege onthe Odessa Investment by Decision Dres.
Compute IRR and NPV in Microsoft Excel 1.IRR Function .docxmccormicknadine86
Compute IRR and NPV in Microsoft Excel
1.IRR Function
Description:
The Microsoft Excel IRR function returns the internal rate of return for a series of cash flows. The cash
flows must occur at regular intervals, but do not have to be the same amounts for each interval.
Syntax
The syntax for the IRR function in Microsoft Excel is:
IRR(range, [estimated_irr] )
Parameters or Arguments
range
A range of cells that represent the series of cash flows.
estimated_irr
Optional. It is your guess at the internal rate of return. If this parameter is omitted, it
assumes an estimated_irr of 0.1 or 10%
Example (as Worksheet Function)
Let's look at some Excel IRR function examples and explore how to use the IRR function as a
worksheet function in Microsoft Excel:
Based on the Excel spreadsheet above:
This first example returns an internal rate of return of 28%. It assumes that you start a
business at a cost of $7,500. You net the following income for the first four years: $3,000,
$5,000, $1,200, and $4,000.
This next example returns an internal rate of return of 5%. It assumes that you start a
business at a cost of $10,000. You net the following income for the first three years: $3,400,
$6,500, and $1,000.
=IRR(B1:B4)
Result: 5%
2.NPV Function
Description
The Microsoft Excel NPV function returns the net present value of an investment.
Syntax
The syntax for the NPV function in Microsoft Excel is:
NPV( discount_rate, value1, [value2, ... value_n] )
Parameters or Arguments
discount_rate
The discount rate for the period.
value1, value2, ... value_n
The future payments and income for the investment (ie: cash flows). There can be up
to 29 values entered.
Note
Microsoft Excel's NPV function does not account for the intial cash outlay, or may account for
it improperly depending on the version of Excel. However, there is a workaround.
This workaround requires that you NOT include the initial investment in the future
payments/income for the investment (ie: value1, value2, ... value_n), but instead, you need to
subtract from the result of the NPV function, the amount of the initial investment.
The workaround formula is also different depending on whether the cash flows occur at the
end of the period (EOP) or at the beginning of the period (BOP).
If the cash flows occur at the end of the period (EOP), you would use the following formula:
=NPV( discount_rate, value1, value2, ... value_n ) - Initial Investment
If the cash flows occur at the beginning of the period (BOP), ou would use the following
formula:
=NPV( discount_rate, value2, ... value_n ) - Initial Investment + value1
Example (as Worksheet Function)
Let's look at some NPV examples and explore how to use the NPV function as a worksheet
function in Microsoft Excel:
This first example returns a net present value of $3,457.19. It assumes that you pay $7,500
as an initial investment . You then receive the following in ...
Compute IRR and NPV in Microsoft Excel 1.IRR Function .docxpatricke8
Compute IRR and NPV in Microsoft Excel
1.IRR Function
Description:
The Microsoft Excel IRR function returns the internal rate of return for a series of cash flows. The cash
flows must occur at regular intervals, but do not have to be the same amounts for each interval.
Syntax
The syntax for the IRR function in Microsoft Excel is:
IRR(range, [estimated_irr] )
Parameters or Arguments
range
A range of cells that represent the series of cash flows.
estimated_irr
Optional. It is your guess at the internal rate of return. If this parameter is omitted, it
assumes an estimated_irr of 0.1 or 10%
Example (as Worksheet Function)
Let's look at some Excel IRR function examples and explore how to use the IRR function as a
worksheet function in Microsoft Excel:
Based on the Excel spreadsheet above:
This first example returns an internal rate of return of 28%. It assumes that you start a
business at a cost of $7,500. You net the following income for the first four years: $3,000,
$5,000, $1,200, and $4,000.
This next example returns an internal rate of return of 5%. It assumes that you start a
business at a cost of $10,000. You net the following income for the first three years: $3,400,
$6,500, and $1,000.
=IRR(B1:B4)
Result: 5%
2.NPV Function
Description
The Microsoft Excel NPV function returns the net present value of an investment.
Syntax
The syntax for the NPV function in Microsoft Excel is:
NPV( discount_rate, value1, [value2, ... value_n] )
Parameters or Arguments
discount_rate
The discount rate for the period.
value1, value2, ... value_n
The future payments and income for the investment (ie: cash flows). There can be up
to 29 values entered.
Note
Microsoft Excel's NPV function does not account for the intial cash outlay, or may account for
it improperly depending on the version of Excel. However, there is a workaround.
This workaround requires that you NOT include the initial investment in the future
payments/income for the investment (ie: value1, value2, ... value_n), but instead, you need to
subtract from the result of the NPV function, the amount of the initial investment.
The workaround formula is also different depending on whether the cash flows occur at the
end of the period (EOP) or at the beginning of the period (BOP).
If the cash flows occur at the end of the period (EOP), you would use the following formula:
=NPV( discount_rate, value1, value2, ... value_n ) - Initial Investment
If the cash flows occur at the beginning of the period (BOP), ou would use the following
formula:
=NPV( discount_rate, value2, ... value_n ) - Initial Investment + value1
Example (as Worksheet Function)
Let's look at some NPV examples and explore how to use the NPV function as a worksheet
function in Microsoft Excel:
This first example returns a net present value of $3,457.19. It assumes that you pay $7,500
as an initial investment . You then receive the following in.
ChapterTool KitChapter 10112018 The Basics of Capital BudgetingJinElias52
ChapterTool KitChapter 1011/20/18 The Basics of Capital Budgeting: Evaluating Cash Flows10-1 An Overview of Capital BudgetingCapital budgeting is the process of analyzing projects and deciding which ones to accept.10-2 The First Step in Project AnalysisThe capital budgeting process begins with estimating a project's expected cash flows. We explain this in the next chapter.The next step is to put the estimated cash flows and other inputs (primarily the project's cost of capital) on a time line, as shown below. The figure below also reports evaluation measures, which we explain in the next sections.Figure 10-1Cash Flows and Selected Evaluation Measures for Projects S and L (Millions of Dollars)Panel A: Inputs for Project Cash Flows and Cost of Capital, rINPUTS:r =10%Initial Cost and Expected Cash FlowsYear01234Project S−$10,000$5,300$4,300$1,874$1,500Project L−$10,000$1,600$2,364$2,469$8,400Panel B: Summary of Selected Evaluation MeasuresProject SProject LNet present value, NPV$804.38$1,000.57Internal rate of return, IRR14.7%13.5%Modified IRR, MIRR12.1%12.7%Profitability index, PI1.081.10Payback2.213.42Discounted payback3.213.83Note: Numbers in the figure are shown as rounded values for clarity in reporting. However unrounded values are used for all calculations.10-3 Net Present Value (NPV)To calculate the NPV, we find the present value of the individual cash flows and then sum those discounted cash flows. The sum is the value the project adds to or subtracts from shareholder wealth.Figure 10-2Finding the NPV for Projects S and L (Millions of Dollars)INPUTS:r =10%Initial Cost and Expected Cash FlowsYear01234Project S−$10,000$5,300$4,300$1,874$1,5004,818←← ↵ ↓ ↓ ↓3,554← ← ← ← ← ← ←← ↵ ↓ ↓1,408← ← ← ← ← ← ← ← ← ← ← ← ←← ↵ ↓1,025← ← ← ← ← ← ← ← ← ← ← ← ← ← ← ← ← ← ←← ↵NPVS = $804Long way:
Sum the PVs of the CFs to find NPVInitial Cost and Expected Cash FlowsYear01234Project L−$10,000$1,600$2,364$2,469$8,400NPVL = $1,001Short way: Use Excel's NPV function.
=NPV(B47,C59:F59)+B59Note: Numbers in the figure are shown as rounded values for clarity in reporting. However unrounded values are used for all calculations.10-4 Internal Rate of Return (IRR)The internal rate of return is defined as the discount rate that equates the present value of a project's cash inflows to its outflows. In other words, the internal rate of return is the interest rate that forces NPV to zero. The calculation for IRR can be tedious, but Excel provides an IRR function that merely requires you to access the function and enter the array of cash flows. The IRRs for Project S and L are shown below, along with the data entry for Project S.Figure 10-3Finding the IRR for Projects S and L (Millions of Dollars)INPUTS:Initial Cost and Expected Cash FlowsYear01234Project S−$10,000$5,300$4,300$1,874$1,5004,621.33←← ↵ ↓ ↓ ↓3,269.26← ← ← ← ← ← ...
Capital Expense PowerPoint Presentation SlidesSlideTeam
This complete deck is oriented to make sure you do not lag in your presentations. Our creatively crafted slides come with apt research and planning. This exclusive deck with twenty two slides is here to help you to strategize, plan, analyse, or segment the topic with clear understanding and apprehension. Utilize ready to use presentation slides on Capital Expense PowerPoint Presentation Slides with all sorts of editable templates, charts and graphs, overviews, analysis templates. It is usable for marking important decisions and covering critical issues. Display and present all possible kinds of underlying nuances, progress factors for an all inclusive presentation for the teams. This presentation deck can be used by all professionals, managers, individuals, internal external teams involved in any company organization. http://bit.ly/2Skys9T
ChapterTool KitChapter 1212912Corporate Valuation and Financial .docxmccormicknadine86
ChapterTool KitChapter 1212/9/12Corporate Valuation and Financial Planning12-2 Financial Planning at MicroDrive, Inc.The process used by MicroDrive to forecast the free cash flows from its operating plan is described in the sections below.Setting Up the Model to Forecast OperationsWe begin with MicroDrive's most recent financial statements and selected additional data.Figure 12-1 MicroDrive’s Most Recent Financial Statements (Millions, Except for Per Share Data)INCOME STATEMENTSBALANCE SHEETS20122013Assets20122013Net sales$ 4,760$ 5,000Cash$ 60$ 50COGS (excl. depr.)3,5603,800ST Investments40-Depreciation170200Accounts receivable380500Other operating expenses480500Inventories8201,000EBIT$ 550$ 500Total CA$ 1,300$ 1,550Interest expense100120Net PP&E1,7002,000Pre-tax earnings$ 450$ 380Total assets$ 3,000$ 3,550Taxes (40%)180152NI before pref. div.$ 270$ 228Liabilities and equityPreferred div.88Accounts payable$ 190$ 200Net income$ 262$ 220Accruals280300Notes payable130280Other DataTotal CL$ 600$ 780Common dividends$48$50Long-term bonds1,0001,200Addition to RE$214$170Total liabilities$ 1,600$ 1,980Tax rate40%40%Preferred stock100100Shares of common stock5050Common stock500500Earnings per share$5.24$4.40Retained earnings800970Dividends per share$0.96$1.00Total common equity$ 1,300$ 1,470Price per share$40.00$27.00Total liabs. & equity$ 3,000$ 3,550The figure below shows all the inputs required to project the financial statements for the scenario that has been selected with the Scenario Manager: Data, What-If Analysis, Scenario Manager. There are two scenarios. The first is named Status Quo because all operating ratios except the sales growth rate are assumed to remain unchanged. The initial sales growth rate was chosen by MicroDrive's managers based on the existing product lines. The growth rate declines over time until it eventually levels off at a sustainable rate. The other scenario is named Final because it is the set of inputs chosen by MicroDrive's management team.Section 1 shows the inputs required to estimate the items in an operating plan. For each of these inputs, Section 1 shows the industry averages, the actual values for the past two years for MicroDrive, and the forecasted values for the next five years. The managers assumed the inputs for future years (except the sales growth rate) would be equal to the inputs in the first projected year.MicroDrive's managers assume that sales will eventually level off at a sustaniable constant rate.Sections 2 and 3 show the data required to estimate the weighted average cost of capital. Section 4 shows the forecasted growth rate in dividends.Note: These inputs are linked throughout the model. If you want to change an input, do it here and not other places in the model.Figure 12-2MicroDrive's Forecast: Inputs for the Selected ScenarioStatus QuoIndustryMicroDriveMicroDriveInputsActualActualForecast1. Operating Ratios2013201220132014201520162017201 ...
More Information:
https://flevy.com/browse/business-document/business-case-template-excel-683
DOCUMENT DESCRIPTION
For individuals who are fairly new at developing business cases, the Business Case Template Excel file provides a step-by-step methodology for developing a high level business case.
This Template Excel is also a companion document of the "How to Develop a Business Case" presentation which guide business leaders make investment decisions by helping them understand the financial impact of those decisions throughout the planning stage of a project to help justify a strategic direction and operating strategy
This Excel template includes the following sections:
- Instruction Guide
- Step 1. Input Variables
- Step 2. Generate Baseline Data
- Step 3. Input Benefit Estimate
- Step 4. Review Benefit Calc
- Step 5. Enter Investment
- Step 6. Review Cap Ex
- Step 7. Review Cash Flow Result
- Step 8. What-If Analysis
- Financial Summary
- Example Charts
Got a question about the product? Email us at support@flevy.com or ask the author directly by using the form to the right. If you cannot view the preview above this document description, go here to view the large preview instead.
CASE17CASE 19 Instructor VersionCopyright 2014 Health .docxwendolynhalbert
CASE17CASE 19 Instructor VersionCopyright 2014 Health Administration Press11/26/14 RN TEMPS, INC. Capital Structure AnalysisThis case illustrates the capital structure decision for a firm that begins with zero debtfinancing.The spreadsheet consists of two separate models: 1) Debt amount and ROE (Rows 35-43) uses income statements to examine the effects of financial leverage on ROE. This model uses a single (constant) interest rate input for all capital structure scenarios.2) Debt amount and Stock Price / CCC (Rows 45-56) examines the effects of debt financing on firm value, cost of capital, and stock price, assuming zero growth (perpetual cash flows.)The model consists of a complete base case analysis--no changes need to be madeto the existing MODEL-GENERATED DATA section. However, all values in the INPUT DATAsection of the student version have been replaced with zeros. Thus, students must determinethe appropriate input values and enter them into the model. These cells are colored red.When this is done, any error cells will be corrected and the base case solution will appear.Note that the model does not contain any risk analyses, so students will have to createtheir own if required by the case. Furthermore, students must create their own graphics(charts) as needed to present their results.The instructor version of the model contains a sheet (Figure 1) that plots both stock priceand cost of capital versus the dollar amount of debt financing. It also contains sheets thatcontain the inputs and outputs for the increased and decreased business risk scenarios.INPUT DATA: KEY OUTPUT:Tax rate40.0% Debt Amount and ROE Input:Debt Amount and ROE Analysis:Market value$12,000,000ExpectedCost of debt10.0%ROESD of ROEAll Equity15.0%1.8%ProbabilityEBIT25% Debt18.0%2.4%0.25$2,500,00050% Debt24.0%3.5%0.5$3,000,00075% Debt42.0%7.1%0.25$3,500,000 Debt Amount and Stock Price / CCC Input:Debt Amount and Stock Price / CCC Analysis:EBIT$3,000,000No. of shares 10,000,000Debt AmountCost of DebtCost of EquityDebt AmountStock PriceCCC $00.0%15.0%$0$1.20015.0%2,500,00010.0%15.5%2,500,000$1.31513.7%5,000,00011.0%16.5%5,000,000$1.39112.9%7,500,00013.0%18.0%7,500,000$1.42512.6%10,000,00016.0%20.0%10,000,000$1.42012.7%12,500,00020.0%25.0%12,500,000$1.37013.1%MODEL-GENERATED DATA: Debt and ROE Analysis: All Equity 25% DebtProbability0.250.500.250.250.500.25EBIT$2,500,000$3,000,000$3,500,000$2,500,000$3,000,000$3,500,000Interest000300,000300,000300,000 EBT$2,500,000$3,000,000$3,500,000$2,200,000$2,700,000$3,200,000Taxes1,000,0001,200,0001,400,000880,0001,080,0001,280,000Net Income$1,500,000$1,800,000$2,100,000$1,320,000$1,620,000$1,920,000ROE12.5%15.0%17.5%14.7%18.0%21.3%TIE Ration.a.n.a.n.a.8.3310.0011.67E(ROE)15.0%18.0%Std dev of ROE1.8%2.4%Coefficient of variation0.120.13 50% Debt 75% DebtProbability0.250.500.250.250.500.25EBIT$2,500,000$3,000,000$3,500,000$2,500,000$3,000,000$3, ...
Monte Carl Simulation is a powerful and effective tool when used properly helps to navigate the expected Net Present Value NPV. This presentation helps to improve the pattern to ackowlege onthe Odessa Investment by Decision Dres.
Schneider, Arnold, (2012) Managerial Accounting, United States, .docxanhlodge
Schneider, Arnold, (2012) Managerial Accounting, United States, Bridgepoint Education Inc
The Evaluation Methods
The evaluation methods discussed here are:
1.
Present value methods (also called discounted cash-flow methods).
(a)
Net present value method (NPV).
(b)
Internal rate of return method (IRR).
2.
Payback period method.
3.
Accounting rate of return method.
Nearly all managerial accountants agree that methods using present value (Methods 1a and 1b) give the best assessment of long-terminvestments. Methods that do not involve the time value of money (Methods 2 and 3) have serious flaws; however, since they are commonlyused for investment evaluation, their strengths and weaknesses are discussed.
Net Present Value Method
The net present value (NPV) method includes the time value of money by using an interest rate that represents the desired rate of return or, atleast, sets a minimum acceptable rate of return. The decision rule is:
If the present value of incremental net cash inflows is greater than the incremental
investment net cash outflow, approve the project.
Using Tables 1 and 2 found at the end of this chapter, the net cash flows for each year are brought back (i.e., discounted) to Year 0 andsummed for all years. An interest rate must be specified. This rate is often viewed as the cost of funds needed to finance the project and is theminimum acceptable rate of return. To discount the cash flows, we use the interest rate and the years that the cash flows occur to obtain theappropriate present value factors from the present value tables. A portion of Table 1 appears below showing the present value factors (theshaded numbers), corresponding to an interest rate of 12 percent, for each year during the Clairmont Timepieces project's life.
Periods
(n)
1%
2%
4%
5%
6%
8%
10%
12%
14%
15%
16%
0
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1
0.990
0.980
0.962
0.952
0.943
0.926
0.909
0.893
0.877
0.870
0.862
2
0.980
0.961
0.925
0.907
0.890
0.857
0.826
0.797
0.769
0.756
0.743
3
0.971
0.942
0.889
0.864
0.840
0.794
0.751
0.712
0.675
0.658
0.641
4
0.961
0.924
0.855
0.823
0.792
0.735
0.683
0.636
0.592
0.572
0.552
5
0.951
0.906
0.822
0.784
0.747
0.681
0.621
0.567
0.519
0.497
0.476
6
0.942
0.888
0.790
0.746
0.705
0.630
0.564
0.507
0.456
0.432
0.410
7
0.933
0.871
0.760
0.711
0.665
0.583
0.513
0.452
0.400
0.376
0.354
8
0.923
0.853
0.731
0.677
0.627
0.540
0.467
0.404
0.351
0.327
0.305
9
0.914
0.837
0.703
0.645
0.592
0.500
0.424
0.361
0.308
0.284
0.263
10
0.905
0.820
0.676
0.614
0.558
0.463
0.386
0.322
0.270
0.247
0.227
These present value factors are used in Figure 10.2 to discount the yearly cash flows to their present values. In Figure 10.2, the net cashinvestment ($95,000) is subtracted from the sum of cash-inflow present values ($137,331). When the residual is positive, the project's rate ofreturn (ROR) is greater than the minimum acceptable ROR. If:
Present value of incremental net cash inflows ≥ Incremental investment cash outf.
This deck consists of total of twenty two slides. It has PPT slides highlighting important topics of Operating Expense PowerPoint Presentation Slides. This deck comprises of amazing visuals with thoroughly researched content. Each template is well crafted and designed by our PowerPoint experts. Our designers have included all the necessary PowerPoint layouts in this deck. From icons to graphs, this PPT deck has it all. The best part is that these templates are easily customizable. Just click the DOWNLOAD button shown below. Edit the colour, text, font size, add or delete the content as per the requirement. Download this deck now and engage your audience with this ready made presentation. http://bit.ly/2UC81PE
In this guide we will consider how to model a net present value (“NPV”). We will also consider the Excel functions available that are specific to calculating an NPV.
Directions Flexible Budget Performance Report Project You a.docxmariona83
Directions
Flexible Budget Performance Report Project
You and your partner will each work on this project on your own laptops, using each other for resources while completing the assignment. In the end, you will Turn in ONE project per team. If you or your partner feels you did not share equally in the work, email me for a possible grade adjustment. Otherwise, you will both receive the same grade. Upload your completed project to Canvas using “Flex Budget_Last Name ID#_Last name ID# “ as the file name.
Kelsey’s Frozen Confectionaries buys and distributes single-serve ice cream treats to convenience stores, ballparks, and amusement parks. In this project, you will create 1) a master budget performance report, and 2) a flexible budget performance report for Kelsey's Frozen Confectionaries. Your performance reports should be developed in such a way that any changes to the original assumptions will correctly ripple through the entire spreadsheet. After developing the performance reports, you will answer questions about the variances and determine whether the variances are consistent with management's explanation about operational changes that took place during the period.
Part 1) DIRECTIONS for Master Budget Performance Report:
1) Use the budget assumptions, along with Excel formulas, to populate the Master Budget column. Note: Your formulas must work such that if ANY of the budget assumptions change, the new assumptions ripple through the entire budget. Part of your grade will be based on whether you correctly formulate the cells. Do NOT TYPE A NUMBER IN ANY CELL!!!
2) Use a formula to calculate the “variance” in cell H7: (Actual – Budget). Copy and paste (or use the fill handle to drag) the formula to the rest of the cells in the column. Leave as positive or negative, rather than absolute values.
3) Use a formula to calculate the “Variance percentage”. NOTE: The percentage is the variance as a percent of the Master Budget. Copy and paste (or drag) the formula to the rest of the cells in the column
4) Format cells appropriately. Attention to detail makes a report look more professional. (For example, percentages shown as %, dollar signs using the accounting or currency format, underlines and double underlines where appropriate, zero decimal places for dollar amounts, etc.,).
5) Use the “If” statement function to show the variances as U or F. The “If” statement can be found under “Formulas, Logical”. Example: =IF(H7>=0,"F","U"). This formula means: If cell H7>0 or H7=0, then mark as “F”; If not greater than or equal to 0, mark as “U”. Be careful with revenues and expense variances since they should be opposite of one another. ALSO- The formula you use should mark any variance of “0” as an “F” since a zero variance means that budget expectations have been met. After using the function, check each line to make sure it is going in the direction you believe it should go.
6) Check your answers us.
Directions Flexible Budget Performance Report Project You a.docxcuddietheresa
Directions
Flexible Budget Performance Report Project
You and your partner will each work on this project on your own laptops, using each other for resources while completing the assignment. In the end, you will Turn in ONE project per team. If you or your partner feels you did not share equally in the work, email me for a possible grade adjustment. Otherwise, you will both receive the same grade. Upload your completed project to Canvas using “Flex Budget_Last Name ID#_Last name ID# “ as the file name.
Kelsey’s Frozen Confectionaries buys and distributes single-serve ice cream treats to convenience stores, ballparks, and amusement parks. In this project, you will create 1) a master budget performance report, and 2) a flexible budget performance report for Kelsey's Frozen Confectionaries. Your performance reports should be developed in such a way that any changes to the original assumptions will correctly ripple through the entire spreadsheet. After developing the performance reports, you will answer questions about the variances and determine whether the variances are consistent with management's explanation about operational changes that took place during the period.
Part 1) DIRECTIONS for Master Budget Performance Report:
1) Use the budget assumptions, along with Excel formulas, to populate the Master Budget column. Note: Your formulas must work such that if ANY of the budget assumptions change, the new assumptions ripple through the entire budget. Part of your grade will be based on whether you correctly formulate the cells. Do NOT TYPE A NUMBER IN ANY CELL!!!
2) Use a formula to calculate the “variance” in cell H7: (Actual – Budget). Copy and paste (or use the fill handle to drag) the formula to the rest of the cells in the column. Leave as positive or negative, rather than absolute values.
3) Use a formula to calculate the “Variance percentage”. NOTE: The percentage is the variance as a percent of the Master Budget. Copy and paste (or drag) the formula to the rest of the cells in the column
4) Format cells appropriately. Attention to detail makes a report look more professional. (For example, percentages shown as %, dollar signs using the accounting or currency format, underlines and double underlines where appropriate, zero decimal places for dollar amounts, etc.,).
5) Use the “If” statement function to show the variances as U or F. The “If” statement can be found under “Formulas, Logical”. Example: =IF(H7>=0,"F","U"). This formula means: If cell H7>0 or H7=0, then mark as “F”; If not greater than or equal to 0, mark as “U”. Be careful with revenues and expense variances since they should be opposite of one another. ALSO- The formula you use should mark any variance of “0” as an “F” since a zero variance means that budget expectations have been met. After using the function, check each line to make sure it is going in the direction you believe it should go.
6) Check your answers us ...
By Analyzing and Utilizing Jean Watson theory of caring, creatTawnaDelatorrejs
By Analyzing and Utilizing Jean Watson theory of caring, create 6-7 slides PowerPoints including your sources on Improvement in two nursing areas:
· Nursing research
· Health disparities
Your sources should be within the last 5 years. Only 2 sources
Name_______________________________
Overview:The connect question requires creation of posted transactions common to manufacturing companies to inventory T-accounts. This assignment builds on these transactions with additional detail relating to the application and incurrence of overhead. Students will complete journal entries and common reports relating to the activity through the cost accounts, including clearing any over- or under-applied overhead. Budgeted/estimated, applied and actual overhead will be examined using multiple application methods including traditional predetermined rates and activity-based costing. Various methods of overhead application will be compared in totality as well as more specifically at a job level basis. Students also will explore the impact of overhead costing in the bidding process typical of companies using job costing.
Use “given” and your “results” from HW 2.1 Question 15 on CONNECT relating to Lock-Tite Company to complete the Project requirements below. Make sure you are using CORRECT answers from connect.
1) Write journal entries in good format for Lock-Tite Company for the following transactions for the period as calculated/given in the problem on CONNECT.
Ref.
Account
Debit
Credit
a) Raw Material purchased on account
a
b) Raw Material used as direct and indirect material
b
c) Recognition of direct and indirect labor owed to employees
c
d) Application of factory overhead to work-in-process
d
e) Recognition of Cost of Goods Manufactured
e
f) Recognition of Sales Revenue
f
g) Recognition of Cost of Goods Sold
g
h) Incurrence of other overhead costs (use “various” to represent multiple accounts.
h
2) Adjusting Factory Overhead: Use these T-accounts to complete the requirements below:
COGS
Unadjusted Balance from connect
AJE
Adjusted COGS balances
Factory Overhead
Unadjusted Balance
AJE
Adjusted COGS balances
a) Include the unadjusted balances in the T accounts above. The COGS unadjusted balance can be found in the partial income statement underneath the T accounts on Question 11 of connect HW2.1 assignment. The unadjusted Factory Overhead balance is the last row of the Factory Overhead T account again in Question 15 of connect HW2.1 assignment.
b) Assume Lock-Tite clears all its under- or over-applied overhead to cost of goods sold. Write the “adjusting” journal entry to zero the Factory Overhead account.
c) Post the journal entry to the COGS and FOH T accounts above 2a and calculate the “adjusted balances for ...
Enhance your audiences knowledge with this well researched complete deck. Showcase all the important features of the deck with perfect visuals. This deck comprises of total of twenty three slides with each slide explained in detail. Each template comprises of professional diagrams and layouts. Our professional PowerPoint experts have also included icons, graphs and charts for your convenience. All you have to do is DOWNLOAD the deck. Make changes as per the requirement. Yes, these PPT slides are completely customizable. Edit the colour, text and font size. Add or delete the content from the slide. And leave your audience awestruck with the professionally designed Financial Expense PowerPoint Presentation Slides complete deck. http://bit.ly/31tQk6l
Part ADiscount rate5CommentsPROJECT 1(Insulate OfficeYearTotal1.docxherbertwilson5999
Part ADiscount rate5%CommentsPROJECT 1
(Insulate OfficeYearTotal12345678910CostsDiscount factorDiscounted costsCumulative discounted costsBenefitsDiscount factorDiscounted benefitsCumulative discounted benefitsCash flowDiscounted benefits - costsCumulative benefits - costsNPVROIPROJECT 2
(Mortgage payment)YearTotal12345678910CostsDiscount factorDiscounted costsCumulative discounted costsBenefitsDiscount factorDiscounted benefitsCumulative discounted benefitsCash flowDiscounted benefits - costsCumulative benefits - costsNPVROIPROJECT 3
(Invest in business)YearTotal12345678910CostsDiscount factorDiscounted costsCumulative discounted costsBenefitsDiscount factorDiscounted benefitsCumulative discounted benefitsCash flowDiscounted benefits - costsCumulative benefits - costsNPVROIPROJECT 4
(Savings - no investment)YearTotal12345678910CostsDiscount factorDiscounted costsCumulative discounted costsBenefitsDiscount factorDiscounted benefitsCumulative discounted benefitsCash flowDiscounted benefits - costsCumulative benefits - costsNPVROI
Part A
Cumulative discounted costs
Cumulative discounted benefits
Mortgage benefitYearMortgage value without investmentMortgage value with investementBenefit based on investment12345678910
SIT374 AND SIT764
PROJECT MANAGEMENT
Net Present Value
Net Present Value
The text gives an example of two projects that have
common positive cash flows after 5 years.
The text also notes “everyone understand a dollar
earned today is worth more tomorrow”. Do we
understand?
Net Present Value
Rationale.
If I spend $1000 today as opposed to in 5 years, I lose
the interest I would have earned on that money over
the 5 years.
If I don’t get paid on time, I lose the interest I should
have earned on the money whilst it wasn’t in my bank
account.
In short…
Hang onto money for a long as you can so you earn the
interest
Get money in as quick as you can so you earn the
interest
Net Present Value
Start with a new spreadsheet, preparing for the
benefits, costs and calculated cashflow for the
anticipated lifecycle of the product.
The discount date in a ‘real’ calculation would likely
come from a finance expert, but could be as simple
as the interest rate of borrowed money. However,
both projects will apply the same rate.
Net Present Value
Add in the anticipated earnings of the product or
project over the anticipated lifespan.
Also, add in the startup costs, and ongoing costs
of the project over the anticipated lifespan of the
project, considering support, maintenance, new
development etc
Net Present Value
As NPV is an analysis of cash flow, calculate the
anticipated cash flow on a yearly basis. A simple
calculation of benefits less costs to indicate the
net benefit in that year.
Net Present Value
NPV can then be calculated using the simple ‘NPV’
function in excel, using the values from your
cashflow fields and your discount rate.
1. IntroversionScore 11 pts.4 - 22 pts.Feedback Some peopMartineMccracken314
1. Introversion
Score : 11 pts.
4 - 22 pts.
Feedback: Some people thrive in teleworking arrangements, whereas others discover that it is neither a satisfying nor productive work environment for them. This scale assesses three personal dispositions that are identified in the literature as characteristics of effective teleworkers: (a) high company alignment, (b) low social needs at work and (c) independent initiative.
Company alignment
Company alignment estimates the extent to which you follow company procedures and have values congruent with company values. The greater the alignment, the more likely that you can abide by company practices while working alone and with direct supervision. While some deviation from company practices may be appropriate, teleworkers need to agree with company values and provide work that is consistent with company expectations most of the time. Scores on this scale range from 4 to 20.
Extroversion
Score: 17 pts.
4 - 22 pts.
Feedback: Low individualism
Individualism refers to the extent that you value independence and personal uniqueness. Highly individualist people value personal freedom, self-sufficiency, control over their own lives, and appreciation of their unique qualities that distinguish them from others.
However, keep in mind that the average level of individualism is higher in some cultures (such as Australia) than in others.
2. Total score: 8 pts.
RANGE BASED FEEDBACK:
6-12 pts.
Feedback: Low work centrality
People with high work centrality define themselves mainly by their work roles and view non-work roles as much less significant. Consequently, people with a high work centrality score likely have lower complexity in their self-concept. This can be a concern because if something goes wrong with their work role, their non-work roles are not of sufficient value to maintain a positive self-evaluation. At the same time, work dominates our work lives, so those with very low scores would be more of the exception than the rule in most societies. Scores range from 6 to 36 with higher scores indicating higher work centrality. The norms in the following table are based on a large sample of Canadian employees (average score was 20.7). However, work centrality norms vary from one group to the next. For example, the average score in a sample of Canadian nurses was around 17 (translated to the scale range used here).
3. Total score: 32 pts.
RANGE BASED FEEDBACK:
28-32 pts.
Feedback: High need for social approval
The need for social approval scale estimates the extent to which you are motivated to seek favourable evaluation from others. Founded on the drive to bond, the need for social approval is a secondary need, because people vary in this need based on their self-concept, values, personality and possibly social norms. This scale ranges from 0 to 32. How high or low is your need for social approval? The ideal would be to compare your score with the collective results of other students in your class. Otherwi ...
1. International financial investors are moving funds from Talona MartineMccracken314
1. International financial investors are moving funds from Talona to other countries. This depreciation is causing even more disenchantment with this Talona's currency. Describe the affects will this have on the supply and demand curves for this currency on the foreign exchange markets?
2. Using a supply and demand diagram, demonstrate how a negative externality leads to market inefficiency. How might the government help to eliminate this inefficiency?
3. Briefly discuss the shortcomings of environmental command-and-control regulations.
4. Some data that at first might seem puzzling: The share of GDP devoted to investment was similar for the United States and South Korea from 1960-1991. However, during these same years South Korea had a 6 percent growth rate of average annual income per person, while the United States had only a 2 percent growth rate. If the saving rates were the same, why were the growth rates so different?
5. “Block Imports—Save Jobs for Some Americans, Lose a Roughly Equal Number of Jobs for Other Americans, and Also Pay High Prices.” Discuss this statement within the context of protectionism.
6. Steve and Craig have been shipwrecked on a deserted island in the South Pacific. Their economic activity consists of either gathering pineapples or fishing. We know Steve can catch four fish in one hour or harvest two baskets of pineapples. In the same time Craig can reel in two fish or harvest two baskets of pineapples.
Assume Craig and Steve both operate on straight-line production possibilities curves. What is Steve's opportunity cost of producing a basket of pineapples? Of a producing a fish? What is Craig's opportunity cost of producing a basket of pineapples? Of a producing a fish?
7. Provide examples of market-oriented environmental policies.
Running head: SC PLAN 1
SC PLAN 4
SC PLAN
Student’s Name
Institution Affiliation
SC PLAN
1. Describe the actions you will take to increase your net cash flows in the near future.
The first step is to reduce living expenditures. It is critical to lessen the amount spent on living expenses and other variables and save for future use. I will have to prevent luxuries such as vacation costs or keep them in check to avoid spending a hefty amount on them. I should check the option to cook for myself and avoid buying food. Also, I will choose a destination I can drive myself to save on rental car expenditures and airfare. I will have a detailed budget indicating the amount required for savings, debt repayment, and investment that will assist only to spend the money on essential expenditures. Further, the savings can help to start a business and become self-employed in the distant future.
I would have to look for a job that pays well or engage in a robust salary negotiation. The right time to negotiate for salary is during a performance review, compensation meeting, or job promotion (Bellon, Cookson, Gilje, & Heimer, 2020). I will ensure that I expand my education and technic ...
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Schneider, Arnold, (2012) Managerial Accounting, United States, .docxanhlodge
Schneider, Arnold, (2012) Managerial Accounting, United States, Bridgepoint Education Inc
The Evaluation Methods
The evaluation methods discussed here are:
1.
Present value methods (also called discounted cash-flow methods).
(a)
Net present value method (NPV).
(b)
Internal rate of return method (IRR).
2.
Payback period method.
3.
Accounting rate of return method.
Nearly all managerial accountants agree that methods using present value (Methods 1a and 1b) give the best assessment of long-terminvestments. Methods that do not involve the time value of money (Methods 2 and 3) have serious flaws; however, since they are commonlyused for investment evaluation, their strengths and weaknesses are discussed.
Net Present Value Method
The net present value (NPV) method includes the time value of money by using an interest rate that represents the desired rate of return or, atleast, sets a minimum acceptable rate of return. The decision rule is:
If the present value of incremental net cash inflows is greater than the incremental
investment net cash outflow, approve the project.
Using Tables 1 and 2 found at the end of this chapter, the net cash flows for each year are brought back (i.e., discounted) to Year 0 andsummed for all years. An interest rate must be specified. This rate is often viewed as the cost of funds needed to finance the project and is theminimum acceptable rate of return. To discount the cash flows, we use the interest rate and the years that the cash flows occur to obtain theappropriate present value factors from the present value tables. A portion of Table 1 appears below showing the present value factors (theshaded numbers), corresponding to an interest rate of 12 percent, for each year during the Clairmont Timepieces project's life.
Periods
(n)
1%
2%
4%
5%
6%
8%
10%
12%
14%
15%
16%
0
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1
0.990
0.980
0.962
0.952
0.943
0.926
0.909
0.893
0.877
0.870
0.862
2
0.980
0.961
0.925
0.907
0.890
0.857
0.826
0.797
0.769
0.756
0.743
3
0.971
0.942
0.889
0.864
0.840
0.794
0.751
0.712
0.675
0.658
0.641
4
0.961
0.924
0.855
0.823
0.792
0.735
0.683
0.636
0.592
0.572
0.552
5
0.951
0.906
0.822
0.784
0.747
0.681
0.621
0.567
0.519
0.497
0.476
6
0.942
0.888
0.790
0.746
0.705
0.630
0.564
0.507
0.456
0.432
0.410
7
0.933
0.871
0.760
0.711
0.665
0.583
0.513
0.452
0.400
0.376
0.354
8
0.923
0.853
0.731
0.677
0.627
0.540
0.467
0.404
0.351
0.327
0.305
9
0.914
0.837
0.703
0.645
0.592
0.500
0.424
0.361
0.308
0.284
0.263
10
0.905
0.820
0.676
0.614
0.558
0.463
0.386
0.322
0.270
0.247
0.227
These present value factors are used in Figure 10.2 to discount the yearly cash flows to their present values. In Figure 10.2, the net cashinvestment ($95,000) is subtracted from the sum of cash-inflow present values ($137,331). When the residual is positive, the project's rate ofreturn (ROR) is greater than the minimum acceptable ROR. If:
Present value of incremental net cash inflows ≥ Incremental investment cash outf.
This deck consists of total of twenty two slides. It has PPT slides highlighting important topics of Operating Expense PowerPoint Presentation Slides. This deck comprises of amazing visuals with thoroughly researched content. Each template is well crafted and designed by our PowerPoint experts. Our designers have included all the necessary PowerPoint layouts in this deck. From icons to graphs, this PPT deck has it all. The best part is that these templates are easily customizable. Just click the DOWNLOAD button shown below. Edit the colour, text, font size, add or delete the content as per the requirement. Download this deck now and engage your audience with this ready made presentation. http://bit.ly/2UC81PE
In this guide we will consider how to model a net present value (“NPV”). We will also consider the Excel functions available that are specific to calculating an NPV.
Directions Flexible Budget Performance Report Project You a.docxmariona83
Directions
Flexible Budget Performance Report Project
You and your partner will each work on this project on your own laptops, using each other for resources while completing the assignment. In the end, you will Turn in ONE project per team. If you or your partner feels you did not share equally in the work, email me for a possible grade adjustment. Otherwise, you will both receive the same grade. Upload your completed project to Canvas using “Flex Budget_Last Name ID#_Last name ID# “ as the file name.
Kelsey’s Frozen Confectionaries buys and distributes single-serve ice cream treats to convenience stores, ballparks, and amusement parks. In this project, you will create 1) a master budget performance report, and 2) a flexible budget performance report for Kelsey's Frozen Confectionaries. Your performance reports should be developed in such a way that any changes to the original assumptions will correctly ripple through the entire spreadsheet. After developing the performance reports, you will answer questions about the variances and determine whether the variances are consistent with management's explanation about operational changes that took place during the period.
Part 1) DIRECTIONS for Master Budget Performance Report:
1) Use the budget assumptions, along with Excel formulas, to populate the Master Budget column. Note: Your formulas must work such that if ANY of the budget assumptions change, the new assumptions ripple through the entire budget. Part of your grade will be based on whether you correctly formulate the cells. Do NOT TYPE A NUMBER IN ANY CELL!!!
2) Use a formula to calculate the “variance” in cell H7: (Actual – Budget). Copy and paste (or use the fill handle to drag) the formula to the rest of the cells in the column. Leave as positive or negative, rather than absolute values.
3) Use a formula to calculate the “Variance percentage”. NOTE: The percentage is the variance as a percent of the Master Budget. Copy and paste (or drag) the formula to the rest of the cells in the column
4) Format cells appropriately. Attention to detail makes a report look more professional. (For example, percentages shown as %, dollar signs using the accounting or currency format, underlines and double underlines where appropriate, zero decimal places for dollar amounts, etc.,).
5) Use the “If” statement function to show the variances as U or F. The “If” statement can be found under “Formulas, Logical”. Example: =IF(H7>=0,"F","U"). This formula means: If cell H7>0 or H7=0, then mark as “F”; If not greater than or equal to 0, mark as “U”. Be careful with revenues and expense variances since they should be opposite of one another. ALSO- The formula you use should mark any variance of “0” as an “F” since a zero variance means that budget expectations have been met. After using the function, check each line to make sure it is going in the direction you believe it should go.
6) Check your answers us.
Directions Flexible Budget Performance Report Project You a.docxcuddietheresa
Directions
Flexible Budget Performance Report Project
You and your partner will each work on this project on your own laptops, using each other for resources while completing the assignment. In the end, you will Turn in ONE project per team. If you or your partner feels you did not share equally in the work, email me for a possible grade adjustment. Otherwise, you will both receive the same grade. Upload your completed project to Canvas using “Flex Budget_Last Name ID#_Last name ID# “ as the file name.
Kelsey’s Frozen Confectionaries buys and distributes single-serve ice cream treats to convenience stores, ballparks, and amusement parks. In this project, you will create 1) a master budget performance report, and 2) a flexible budget performance report for Kelsey's Frozen Confectionaries. Your performance reports should be developed in such a way that any changes to the original assumptions will correctly ripple through the entire spreadsheet. After developing the performance reports, you will answer questions about the variances and determine whether the variances are consistent with management's explanation about operational changes that took place during the period.
Part 1) DIRECTIONS for Master Budget Performance Report:
1) Use the budget assumptions, along with Excel formulas, to populate the Master Budget column. Note: Your formulas must work such that if ANY of the budget assumptions change, the new assumptions ripple through the entire budget. Part of your grade will be based on whether you correctly formulate the cells. Do NOT TYPE A NUMBER IN ANY CELL!!!
2) Use a formula to calculate the “variance” in cell H7: (Actual – Budget). Copy and paste (or use the fill handle to drag) the formula to the rest of the cells in the column. Leave as positive or negative, rather than absolute values.
3) Use a formula to calculate the “Variance percentage”. NOTE: The percentage is the variance as a percent of the Master Budget. Copy and paste (or drag) the formula to the rest of the cells in the column
4) Format cells appropriately. Attention to detail makes a report look more professional. (For example, percentages shown as %, dollar signs using the accounting or currency format, underlines and double underlines where appropriate, zero decimal places for dollar amounts, etc.,).
5) Use the “If” statement function to show the variances as U or F. The “If” statement can be found under “Formulas, Logical”. Example: =IF(H7>=0,"F","U"). This formula means: If cell H7>0 or H7=0, then mark as “F”; If not greater than or equal to 0, mark as “U”. Be careful with revenues and expense variances since they should be opposite of one another. ALSO- The formula you use should mark any variance of “0” as an “F” since a zero variance means that budget expectations have been met. After using the function, check each line to make sure it is going in the direction you believe it should go.
6) Check your answers us ...
By Analyzing and Utilizing Jean Watson theory of caring, creatTawnaDelatorrejs
By Analyzing and Utilizing Jean Watson theory of caring, create 6-7 slides PowerPoints including your sources on Improvement in two nursing areas:
· Nursing research
· Health disparities
Your sources should be within the last 5 years. Only 2 sources
Name_______________________________
Overview:The connect question requires creation of posted transactions common to manufacturing companies to inventory T-accounts. This assignment builds on these transactions with additional detail relating to the application and incurrence of overhead. Students will complete journal entries and common reports relating to the activity through the cost accounts, including clearing any over- or under-applied overhead. Budgeted/estimated, applied and actual overhead will be examined using multiple application methods including traditional predetermined rates and activity-based costing. Various methods of overhead application will be compared in totality as well as more specifically at a job level basis. Students also will explore the impact of overhead costing in the bidding process typical of companies using job costing.
Use “given” and your “results” from HW 2.1 Question 15 on CONNECT relating to Lock-Tite Company to complete the Project requirements below. Make sure you are using CORRECT answers from connect.
1) Write journal entries in good format for Lock-Tite Company for the following transactions for the period as calculated/given in the problem on CONNECT.
Ref.
Account
Debit
Credit
a) Raw Material purchased on account
a
b) Raw Material used as direct and indirect material
b
c) Recognition of direct and indirect labor owed to employees
c
d) Application of factory overhead to work-in-process
d
e) Recognition of Cost of Goods Manufactured
e
f) Recognition of Sales Revenue
f
g) Recognition of Cost of Goods Sold
g
h) Incurrence of other overhead costs (use “various” to represent multiple accounts.
h
2) Adjusting Factory Overhead: Use these T-accounts to complete the requirements below:
COGS
Unadjusted Balance from connect
AJE
Adjusted COGS balances
Factory Overhead
Unadjusted Balance
AJE
Adjusted COGS balances
a) Include the unadjusted balances in the T accounts above. The COGS unadjusted balance can be found in the partial income statement underneath the T accounts on Question 11 of connect HW2.1 assignment. The unadjusted Factory Overhead balance is the last row of the Factory Overhead T account again in Question 15 of connect HW2.1 assignment.
b) Assume Lock-Tite clears all its under- or over-applied overhead to cost of goods sold. Write the “adjusting” journal entry to zero the Factory Overhead account.
c) Post the journal entry to the COGS and FOH T accounts above 2a and calculate the “adjusted balances for ...
Enhance your audiences knowledge with this well researched complete deck. Showcase all the important features of the deck with perfect visuals. This deck comprises of total of twenty three slides with each slide explained in detail. Each template comprises of professional diagrams and layouts. Our professional PowerPoint experts have also included icons, graphs and charts for your convenience. All you have to do is DOWNLOAD the deck. Make changes as per the requirement. Yes, these PPT slides are completely customizable. Edit the colour, text and font size. Add or delete the content from the slide. And leave your audience awestruck with the professionally designed Financial Expense PowerPoint Presentation Slides complete deck. http://bit.ly/31tQk6l
Part ADiscount rate5CommentsPROJECT 1(Insulate OfficeYearTotal1.docxherbertwilson5999
Part ADiscount rate5%CommentsPROJECT 1
(Insulate OfficeYearTotal12345678910CostsDiscount factorDiscounted costsCumulative discounted costsBenefitsDiscount factorDiscounted benefitsCumulative discounted benefitsCash flowDiscounted benefits - costsCumulative benefits - costsNPVROIPROJECT 2
(Mortgage payment)YearTotal12345678910CostsDiscount factorDiscounted costsCumulative discounted costsBenefitsDiscount factorDiscounted benefitsCumulative discounted benefitsCash flowDiscounted benefits - costsCumulative benefits - costsNPVROIPROJECT 3
(Invest in business)YearTotal12345678910CostsDiscount factorDiscounted costsCumulative discounted costsBenefitsDiscount factorDiscounted benefitsCumulative discounted benefitsCash flowDiscounted benefits - costsCumulative benefits - costsNPVROIPROJECT 4
(Savings - no investment)YearTotal12345678910CostsDiscount factorDiscounted costsCumulative discounted costsBenefitsDiscount factorDiscounted benefitsCumulative discounted benefitsCash flowDiscounted benefits - costsCumulative benefits - costsNPVROI
Part A
Cumulative discounted costs
Cumulative discounted benefits
Mortgage benefitYearMortgage value without investmentMortgage value with investementBenefit based on investment12345678910
SIT374 AND SIT764
PROJECT MANAGEMENT
Net Present Value
Net Present Value
The text gives an example of two projects that have
common positive cash flows after 5 years.
The text also notes “everyone understand a dollar
earned today is worth more tomorrow”. Do we
understand?
Net Present Value
Rationale.
If I spend $1000 today as opposed to in 5 years, I lose
the interest I would have earned on that money over
the 5 years.
If I don’t get paid on time, I lose the interest I should
have earned on the money whilst it wasn’t in my bank
account.
In short…
Hang onto money for a long as you can so you earn the
interest
Get money in as quick as you can so you earn the
interest
Net Present Value
Start with a new spreadsheet, preparing for the
benefits, costs and calculated cashflow for the
anticipated lifecycle of the product.
The discount date in a ‘real’ calculation would likely
come from a finance expert, but could be as simple
as the interest rate of borrowed money. However,
both projects will apply the same rate.
Net Present Value
Add in the anticipated earnings of the product or
project over the anticipated lifespan.
Also, add in the startup costs, and ongoing costs
of the project over the anticipated lifespan of the
project, considering support, maintenance, new
development etc
Net Present Value
As NPV is an analysis of cash flow, calculate the
anticipated cash flow on a yearly basis. A simple
calculation of benefits less costs to indicate the
net benefit in that year.
Net Present Value
NPV can then be calculated using the simple ‘NPV’
function in excel, using the values from your
cashflow fields and your discount rate.
1. IntroversionScore 11 pts.4 - 22 pts.Feedback Some peopMartineMccracken314
1. Introversion
Score : 11 pts.
4 - 22 pts.
Feedback: Some people thrive in teleworking arrangements, whereas others discover that it is neither a satisfying nor productive work environment for them. This scale assesses three personal dispositions that are identified in the literature as characteristics of effective teleworkers: (a) high company alignment, (b) low social needs at work and (c) independent initiative.
Company alignment
Company alignment estimates the extent to which you follow company procedures and have values congruent with company values. The greater the alignment, the more likely that you can abide by company practices while working alone and with direct supervision. While some deviation from company practices may be appropriate, teleworkers need to agree with company values and provide work that is consistent with company expectations most of the time. Scores on this scale range from 4 to 20.
Extroversion
Score: 17 pts.
4 - 22 pts.
Feedback: Low individualism
Individualism refers to the extent that you value independence and personal uniqueness. Highly individualist people value personal freedom, self-sufficiency, control over their own lives, and appreciation of their unique qualities that distinguish them from others.
However, keep in mind that the average level of individualism is higher in some cultures (such as Australia) than in others.
2. Total score: 8 pts.
RANGE BASED FEEDBACK:
6-12 pts.
Feedback: Low work centrality
People with high work centrality define themselves mainly by their work roles and view non-work roles as much less significant. Consequently, people with a high work centrality score likely have lower complexity in their self-concept. This can be a concern because if something goes wrong with their work role, their non-work roles are not of sufficient value to maintain a positive self-evaluation. At the same time, work dominates our work lives, so those with very low scores would be more of the exception than the rule in most societies. Scores range from 6 to 36 with higher scores indicating higher work centrality. The norms in the following table are based on a large sample of Canadian employees (average score was 20.7). However, work centrality norms vary from one group to the next. For example, the average score in a sample of Canadian nurses was around 17 (translated to the scale range used here).
3. Total score: 32 pts.
RANGE BASED FEEDBACK:
28-32 pts.
Feedback: High need for social approval
The need for social approval scale estimates the extent to which you are motivated to seek favourable evaluation from others. Founded on the drive to bond, the need for social approval is a secondary need, because people vary in this need based on their self-concept, values, personality and possibly social norms. This scale ranges from 0 to 32. How high or low is your need for social approval? The ideal would be to compare your score with the collective results of other students in your class. Otherwi ...
1. International financial investors are moving funds from Talona MartineMccracken314
1. International financial investors are moving funds from Talona to other countries. This depreciation is causing even more disenchantment with this Talona's currency. Describe the affects will this have on the supply and demand curves for this currency on the foreign exchange markets?
2. Using a supply and demand diagram, demonstrate how a negative externality leads to market inefficiency. How might the government help to eliminate this inefficiency?
3. Briefly discuss the shortcomings of environmental command-and-control regulations.
4. Some data that at first might seem puzzling: The share of GDP devoted to investment was similar for the United States and South Korea from 1960-1991. However, during these same years South Korea had a 6 percent growth rate of average annual income per person, while the United States had only a 2 percent growth rate. If the saving rates were the same, why were the growth rates so different?
5. “Block Imports—Save Jobs for Some Americans, Lose a Roughly Equal Number of Jobs for Other Americans, and Also Pay High Prices.” Discuss this statement within the context of protectionism.
6. Steve and Craig have been shipwrecked on a deserted island in the South Pacific. Their economic activity consists of either gathering pineapples or fishing. We know Steve can catch four fish in one hour or harvest two baskets of pineapples. In the same time Craig can reel in two fish or harvest two baskets of pineapples.
Assume Craig and Steve both operate on straight-line production possibilities curves. What is Steve's opportunity cost of producing a basket of pineapples? Of a producing a fish? What is Craig's opportunity cost of producing a basket of pineapples? Of a producing a fish?
7. Provide examples of market-oriented environmental policies.
Running head: SC PLAN 1
SC PLAN 4
SC PLAN
Student’s Name
Institution Affiliation
SC PLAN
1. Describe the actions you will take to increase your net cash flows in the near future.
The first step is to reduce living expenditures. It is critical to lessen the amount spent on living expenses and other variables and save for future use. I will have to prevent luxuries such as vacation costs or keep them in check to avoid spending a hefty amount on them. I should check the option to cook for myself and avoid buying food. Also, I will choose a destination I can drive myself to save on rental car expenditures and airfare. I will have a detailed budget indicating the amount required for savings, debt repayment, and investment that will assist only to spend the money on essential expenditures. Further, the savings can help to start a business and become self-employed in the distant future.
I would have to look for a job that pays well or engage in a robust salary negotiation. The right time to negotiate for salary is during a performance review, compensation meeting, or job promotion (Bellon, Cookson, Gilje, & Heimer, 2020). I will ensure that I expand my education and technic ...
1. Interventionstreatment· The viral pinkeye does not need any MartineMccracken314
1. Interventions/treatment
· The viral pinkeye does not need any medication
· The bacterial pinkeye is treated with ointment or eye droplets
2. Possible nursing diagnosis
· Checking the specific infection affecting the eye
· Identifying burning eyes
· Increased anxiety with red eyes
3. Sign and symptoms
· Eye irritation
· Eye tearing
· Eye redness
· Eye discomfort
4. Nursing Interventions
· Putting some droplets in the kid’s eye
· Using a antibiotic ointment
· Administering ibuprofen to the kid
5. Risk factors
· Allergies
· A women having an STD during pregnancy
· Exposing the child to areas with lots of bacteria
6. Pathophysiology
The infected eye shows through an inflammation that is swollen and red. The conjunctiva shows and this is the clear membrane seen in the part where the eye is white. It remains this way if not treated for a while before it ends with medication administered or just ends naturally.
7. Complications
· A scaring in the child’s eye if the conjunctivitis is caused by allergic reactions
· It can aggravate to cause different conditions such as meningitis
8. Diagnostic Procedure
· Administering the medicine using eye droplets
· Rubbing the eye area with the ointment
...
1. Introduction and background information about solvatochromism uMartineMccracken314
1. Introduction and background information about solvatochromism using Reichardt’s dye? (400-500 words)
2. Discuss the properties of Reichardt’s dye that cause it to change its wavelength of maximum absorbance in the presence of solvents of differing polarities.
3. Discuss solvatochromism. Are there other dyes which exhibit this effect?
4. Would it be possible to use the wavelength of maximum absorbance in the presence of Reichardt’s dye to determine the water content of acetone solutions?
...
1. Integrity, the basic principle of healthcare leadership.ContaMartineMccracken314
1. Integrity, the basic principle of healthcare leadership.
Contains unread posts
Mateo Alba posted May 12, 2021 10:04 PM
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Integrity of any organization regardless whether it is in healthcare or business or government is paramount. Because of integrity comes trust. Having trust in a healthcare organization is nonnegotiable. It is the foundation of a world-class organization. Executives who ignore ethics run the risk of personal and corporate liability in today’s increasingly tough legal environment (Lynn S. Paine, 1994, Managing for Organizational Integrity, pp. 2-21)
First, the healthcare organization. The healthcare organization is the head or the governing body. It is charged of day-to-day functions, establish policies, guidance, business process, safety, security and all the administrative duties. Integrity is and must be the cornerstone of any healthcare organization. Without it, no clinicians or workers that would knowingly work for an organization that they cannot trust or feel safe. And most importantly, if the patients do not have trust in the organization, they will avoid that facility at all cost.
Second, the clinicians. The clinicians are what makes the organization or facility function. Whether they are the providers, nurses or staff it is important that they have the integrity to always do what is right not only for the healthcare team or the organization, but most specially for the patient. It starts with the clinical leaders building trust to their subordinate staff by having the integrity and values of what a leader should be. Once that is established, then it permeates throughout the entire team. Thereby improving the healthcare delivery.
Lastly, and the most important is the patient. At the center of the entire system needs to be the patient. Once the patient recognizes the integrity or values of the healthcare organization and the clinicians delivering healthcare, patient trust is established. The patient satisfaction also increases. According to Cowing, Davino-Ramaya, Ramaya, Szmerekovsky, 2009, pp.72, “if patients are satisfied with clinician-patient interactions, they are likely to be more compliant with their treatment plan, to understand their role in the recovery process, and to follow through with the recommended treatment”. Having integrity or values in the healthcare delivery is the basic principle of healthcare leadership.
Cowing, M., Davino-Ramaya, C. M., Ramaya, K., & Szmerekovsky, J. (2009). Health care delivery performance: service, outcomes, and resource stewardship. The Permanente Journal, 13(4), 72–78. Retrieved from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2911834/
Lynn S. Paine, 1994, Managing for Organizational Integrity. Harvard business review, 2-21. Retrieved from Managing for Organizational Integrity (hbr.org)
2. Medical Delivery Influences
Contains unread posts
Robert Breeden posted May 12, 2021 9:44 AM
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Hello,
The influence within the medical community is so important and ...
1. Information organized and placed in a logical sequence (10 poMartineMccracken314
1.
Information organized and placed in a logical sequence (10 points)
Points Awarded
2.
Demonstrated knowledge of ethical dilemma presented by:
2a. Summarized the situation (10)
2b. Explained the ethical dilemma (5)
2c. Solved the problem as a professional RN (15)
3.
Responses supported with specific ANA Codes
(20)
4.
Visual aids professional, visually interesting
& aided in understanding material; proper grammar/spelling/punctuation-no more than 2 errors in presentation(10)
5.
Maintained eye contact of audience (10)
6.
Voice clear & audible (10)
7.
Encouraged class participation (5)
8.
Reference slide that includes references in APA
format (5)
Total points possible = 100
NSG 100
Case Study in-class Presentations Assignment
1): Moral Courage with a Dying Patient
Mr. T. is an 82-year-old widower who has been a patient on your unit several times over the past 5 years. His CHF, COPD, and diabetes have taken a toll on his body. He now needs oxygen 24 hours a day and still has dyspnea and tachycardia at rest. On admission, his ejection fraction is less than 20%, EKG shows a QRS interval of greater than 0.13 seconds, and his functional class is IV on NYHA assessment.
He has remained symptomatic despite maximum medical management with a vasodilator and diuretics. He tells you, "This is my last trip; I am glad I have made peace with my family and God. Nurse, I am ready to die." You ask about an advance directive and he tells you his son knows that he wants no heroics, but they just have never gotten around to filling out the form. When the son arrives, you suggest that he speak with the social worker to complete the advance directive and he agrees reluctantly. You page the physician to discuss DNR status with the son. Unfortunately, Mr. T. experiences cardiac arrest before the discussion occurs and you watch helplessly as members of the Code Blue Team perform resuscitation. Mr. T. is now on a ventilator and the son has dissolved into tears with cries of, "Do not let him die!"
2): Moral Courage to Confront Bullying
Melissa started on the unit as a new graduate 5 weeks ago. She is still in orientation and has a good relationship with her preceptor. The preceptor has been assigned consistently to Melissa for most of the last 4 weeks, but due to family emergency has not been available in the last week. Melissa has been told that she will be precepted by a different nurse for the remainder of her orientation. The new preceptor has not been welcoming, supportive, or focused on the educational goals of the orientation. In fact, this new preceptor has voiced to all who will listen her feelings about the incompetence of new BSN graduates. The crisis occurs when Melissa fails to recognize a patient's confusion as a result of an adverse medication effect. The preceptor berates Melissa in the nurses' station, makes sarcastic comments in shift report abou ...
1. In our grant application, we included the following interventioMartineMccracken314
1. In our grant application, we included the following interventions as our evidence-based programs: Family Therapy (to promote family acceptance and support, a key factor for overall health outcomes for this population), Motivational Interviewing (to address higher co-occurrence of substance use concerns), Trauma-Focused Treatment (including EMDR Therapy and TF-CBT, to address higher rates of complex trauma including from systemic oppression), and CBT (a gold standard treatment modality, but adapted to meet the needs of our client population by incorporating elements of
Solution
s-Focused or Narrative approaches to make it more strengths-based).
For questions 2-4, you would need to do some of your own research in the literature on these treatment modalities and determine for yourself if there were best practices that should be incorporated into the plan used at the agency.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
Cultural Competency: A Key to Effective Future Social Work With Racially and Ethnically Diverse E...
Min, Jong Won
Families in Society; Jul-Sep 2005; 86, 3; ProQuest One Academic
pg. 347
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...
1. I believe that the protagonist is Nel because she is the one thMartineMccracken314
1. I believe that the protagonist is Nel because she is the one that goes through different changes throughout the book. I also think she is the protagonist because most people can relate to her more. Nel was done wrong by Sula and her husband Jude Green. Sula did the one thing that a best friend should never do and, that is sleep with your best friend's husband. Even though Sula did a terrible thing Nel still cares about her best friend because she goes and visits her when she is sick even after all the pain she caused her. Nel is also deeply saddened when she visits Sulas grave. That is not the only thing that happened to Nel. Nel not only had to deal with the affair but also accepted her guilt in Chicken Little's drowning. But in the end, Nel realized she enjoyed watching him drown.
Everything changed when Sula came back to Nels life. Nel was happy before. She was happy with her family and her husband, but when Sula came back that all changed. After the affair and Sulas death, Nel was alone. Nel became a single mother and, she no longer has a good relationship with another man.
2. I believe that although the title of the story is Sula, the main protaginist of the story is Nel. Nel is kept until the end of the story and Sulay passes away and exit's the story. I think in this pivitol moment is when the author wanted to make Nel the main character. Nel contained her emotion until towards the end of the story when she has a conversation with Eva, Nel nervously comments "Who told you all these lies? Miss Peace? Who told you? Why are you telling lies on me?" I believe the author wanted us to feel the anxiousness and wonder that Nel found out that somebody finally knew about the little boy being thrown. I believe this admission of guilt to Eva brings closure to Nel. Nel was trying to hide her emotions the entire time and it wasn't after being confronted that she broke down about it and visited Sulay's grave. Nel even stated "I don't know. No." when asked whether somebody saw the boy being thrown into the river. This shows that Nel was not sure at all in the moment it happened whether somebody knew. Nel wanted to not think about what happen forever and try to mute the situation but Eva bringing it up, made Nel feel terrible about what happened which is why she ended up visting Sulay's grave. I think muting herself from knowing the little boy was thrown was still not a 'good' way to look at it, from her end. She wanted to believe a lie by just pretending it never happened. It wasn't after someone brought up the situation to her that her feelings change.
3. Although the novel is titled Sula, the real protagonist is Nel because she is the one who is transformed by the end. Sula and Nel were very great friends and were very dedicated to each other. But they were also very different. Nel was known as the more mature and "good person" while Sula is more impulsive. "Nel is the product of a family that believes deeply in social conventions, hers is a st ...
1. If the profit from the sale of x units of a product is P = MartineMccracken314
1. If the profit from the sale of x units of a product is P = 105x − 300 − x2, what
level(s) of production will yield a profit of $1050? (Enter your answers as a
comma-separated list.)
x = _________ units
2. The total costs for a company are given by
C(x) = 5400 + 80x + x2
and the total revenues are given by
R(x) = 230x.
Find the break-even points. (Enter your answers as a comma-separated list.)
x= __________ units
3. If total costs are C(x) = 900 + 800x and total revenues are R(x) = 900x − x2, find the
break-even points. (Enter your answers as a comma-separated list.)
x= _____________
4. For the years since 2001, the percent p of high school seniors who have tried marijuana
can be considered as a function of time t according to
p = f(t) = 0.17t2 − 2.61t + 52.64
where t is the number of years past 2000.† In what year after 2000 is the percent
predicted to reach 75%, if this function remains valid?
_______________
5. Using data from 2002 and with projections to 2024, total annual expenditures for
national health care (in billions of dollars) can be described by
E = 4.61x2 + 43.4x + 1620
where x is the number of years past 2000.† If the pattern indicated by the model
remains valid, in what year does the model predict these expenditures will reach
$15,315 billion?
__________________
6. The monthly profit from the sale of a product is given by P = 32x − 0.2x2 − 150 dollars.
(a) What level of production maximizes profit?
___________ units
(b) What is the maximum possible profit?
$_____________
7. Consider the following equation.
y = 9 + 6x − x2
(a) Find the vertex of the graph of the equation.
(x, y) = (__________)
(b) Determine what value of x gives the optimal value of the function.
x=_____________
(c) Determine the optimal (maximum or minimum) value of the function.
y=______________
8. Consider the following equation.
f(x) = 6x − x2
(a) Find the vertex of the graph of the equation.
(x, y) = (__________)
(b) Determine what value of x gives the optimal value of the function.
x=_____________
(c) Determine the optimal (maximum or minimum) value of the function.
f(x)= _____________
9. Find the maximum revenue for the revenue function R(x) = 358x − 0.7x2. (Round your
answer to the nearest cent.)
R = $______________
10. The profit function for a certain commodity is P(x) = 150x − x2 − 1000. Find the level of
production that yields maximum profit, and find the maximum profit.
x= _________ units
P=$ _________
11. If, in a monopoly market, the demand for a product is p = 2000 − x and the revenue is
R = px, where x is the number of units sold, what price will maximize revenue?
$________________
12. If the supply function for a commodity is p = q2 + 6q + 16 and the demand function is p
= −3q2 + 4q + 436, find the equilibrium quantity and equilibrium price.
equilibrium quantity_______________
equilibrium price $_______________
13. If the supply and demand functions for a commodity are given by p ...
1. How does CO2 and other greenhouse gases promote global warminMartineMccracken314
1. How does CO2 and other greenhouse gases promote global warming? Discuss your opinion on the use of geoengineering measures to mitigate the effects of global warming.
Your response should be at least 250 words in length.
2. How does CO2 and other greenhouse gases promote global warming? Discuss your opinion on the use of geoengineering measures to mitigate the effects of global warming.
Your response should be at least 250 words in length.
Raw DataNamePayResponsibilitiesSupervisionGenderDepartmentRudolph211MaleAccountingOlga211FemaleAccountingInstructionsErnest211MaleAccountingEmily211FemaleAccountingThe sheet labeled "Raw Data" lists 366 employees and their rating (1-5) of their satisfaction with their Pay, Responsibilities, and Supervision. A rating of 5 is the highest satisfaction.Bobby211MaleAccountingRaw Data also includes the Gender and Department for each employee.Benjamin211MaleAccountingBeatrice211FemaleAccountingInsert a new column in EKeith211MaleAccountingLabel this new column "Overall Satisfaction Rating"Hilda211FemaleAccountingFor each employee, compute the Overall Satisfaction Rating as the Average of Pay, Responsibilities, and Supervision.Leslie311MaleAccountingFormat Overall Satisfaction Rating to one decimal place.Curtis311MaleAccountingAlice311FemaleAccountingOn a New sheet titled Results, create a Pivot Chart & Pivot TableSophie311FemaleAccountingAssign Gender to Columns, Department to rows, and Pay to Values. Change the value field setting from Sum to Average if necessary.Sally311FemaleAccountingSort the departments in descending order of satisfaction.Melvin311MaleAccountingCreate a title for the chart, which includes your last namePearl411FemaleAccountingBe sure your chart includes a legend for male & female employees, change male color to blue and female to orangeJohnny411MaleAccountingBe sure to include axis titlesEunice411FemaleAccountingFormat the vertical axis for a max of 5 and major tick marks at 1 and one decimal place.Opal212FemaleAccountingJulia212FemaleAccountingCreate a new sheet titled "Graphs".Jimmie212MaleAccountingCopy & Paste as Picture your graph of Pay SatisfactionEsther212FemaleAccountingAlbert212MaleAccountingAlter your Pivot chart/table to display Responsibilities Satisfaction. Change titles as needed.Mike212MaleAccountingPaste this chart on the Graphs sheetMarion212MaleAccountingJosephine212FemaleAccountingAlter your Pivot chart/table to display Supervision Satisfaction. Change titles as needed.Ida212FemaleAccountingPaste this chart on the Graphs sheetGerald212MaleAccountingCaroline212FemaleAccountingAlter your Pivot chart/table to display Overall Satisfaction. Change titles as needed.Alberta212FemaleAccountingPaste this chart on the Graphs sheetLeroy312MaleAccountingLeave Results sheet with the Pivot Table & Chart displaying the Overall Satisfaction.Anita312FemaleAccountingMildred412FemaleAccountingBeulah412FemaleAccountingAda412FemaleAccountingClayton212MaleAccountingWayne312MaleA ...
1. How do you think communication and the role of training addressMartineMccracken314
1. How do you think communication and the role of training address performance gaps or training needs as it relates to how Adults learn?
2. There are many ways – or methods – available to gather data during a need’s assessment. Each one has advantages and disadvantages. What is important is to select the appropriate method based on your business problem. The most common methods for data gathering are:
· Document reviews or Extant Data Analysis – reviewing existing material like process maps, procedure guides, previous training material, etc.,
· Needs Assessment
· Interviews
· Focus groups
· Surveys
· Questionnaires
· Direct Observations
· Testing
· Subject Matter Expert Analysis
Select one of these data gathering methods to discuss and share what you see as the advantages and disadvantages associated with using the selected method.
1. Team teaching
In team teaching, both teachers are in the room at the same time but take turns teaching the whole class. Team teaching is sometimes called “tag team teaching.” You and your co-teacher teacher are a bit like co-presenters at a conference or the Oscars. You don’t necessarily plan who takes which part of the lesson, and when one of you makes a point, the other can jump in and elaborate if needed.
Team teaching can make you feel vulnerable. It asks you to step outside of your comfort zone and allow another teacher to see how you approach a classroom full of students. However, it also gives you the opportunity to learn about and improve your teaching skills by having a partner who can provide feedback and — in some cases — mentorship.
In team teaching, as well as the five other co-teaching models below, a teacher team may be made up of two general education teachers, two special education teachers, or one of each. Or, in some cases, it may be a teacher and a paraprofessional working together. Some IEPs specify that a student’s teaching team needs to include a general education teacher and a special education teacher.
Here’s what you need to know about the team teaching method:
What it looks like in the classroom
Both teachers teach at the front of the room and move about to check in with students (as needed).
Benefits
· Provides both teachers with an active instructional role
· Introduces students to complementary teaching styles and personalities
· Allows for lessons to be presented by two different people with different teaching styles
· Models multiple ways of presenting and engaging with information
· Models for students what a successful collaborative working relationship can look like
· Provides more opportunities to pursue teachable moments that may arise
Challenges
· Takes time and trust for teachers to build a working relationship that values each teacher equally in the classroom
· Necessitates a lot of planning time and coordination of schedules
· Requires teachers to have equal involvement not just in planning, but also in grading, which means assignments need to be evaluated ...
1. How brain meets its requirement for its energy in terms of wellMartineMccracken314
1. How brain meets its requirement for its energy in terms of well-fed and during starvation or fasting?
2. Explain the utilization of different sources of energy in muscle during anaerobic and aerobic conditions of high physical activity and resting?
3. Why and how adipose tissue and kidney are significant for fuel metabolism?
4. Explain in detail why liver is significant for metabolism of mammals and how does it coordinate the different metabolic pathways essential for organism?
5. Explain the Cori cycle and glucose-alanine cycle for interorgan fuel metabolism?
...
1. Give an introduction to contemporary Chinese art (Talk a littleMartineMccracken314
1. Give an introduction to contemporary Chinese art (Talk a little bit about some of the major changes in Chinese art)
2. Read the article that is provided. Do some research on the artist, Xu Bing. According to the article, give some background information about Xu Bing, and investigate the body of work.
3. Select one piece of his artwork to write about. It could be a traditional work of art, such as drawing, painting, or sculpture, or something more experimental like performance art, body art, or installation art.
4. Write a 3-page analysis of the artwork you select. The paper should have a short introduction and conclusion, but the body should focus on your analysis of the artwork. Some of the questions that you might want to work through in the paper include: Why is the work important? In what ways does it challenge the viewer? Is there an allegorical meaning to the work? How is it in dialogue with Western art traditions or earlier Chinese art traditions? Does it engage with Chinese history? Etc.
5. Be sure to include an image of the work you select into the paper, and the paper must be grammatically correct.
...
1. For this reaction essay is a brief written reaction to the readMartineMccracken314
1. For this reaction essay is a brief written reaction to the readings. It may be somewhat informal (and I would encourage you to be personal), but it must be well-written and well-organized. It must not be more than 2 pages, use 12-point font, single-spaced, at least 1" margins. You will react to the results of this systematic review article on Telemedicine " Effectiveness of Telemedicine A Systematic Review of Reviews.pdf
Focus on the results of the synthesis only, react to the authors' conclusions- do you agree or disagree with their synthesis? Discuss your opinion, are there faults in their conclusions?
Telemedicine is increasingly being suggested as an alternative for an in-person visit, especially with emergent diseases that call for person-to-person distancing. What are the potential concerns with this suggestion? What are in the authors' synthesis and conclusions underscore the limitations of this suggestion?
2. The next day a representative from Bristol Myers Squibb visits your office and tells you that Plavix® (clopidogrel) decreases cardiovascular events by 8.7% compared to aspirin. That sure sounds good to you, as you have many elderly patients at risk of heart attacks and strokes and many are already on aspirin. The brochure quotes the CAPRIE study, and you decide to investigate this further. A review of the 1996 article reveals that study patients on Plavix® experienced cardiovascular events 9.78% of the time compared to 10.64% of the time with aspirin. Plavix® was approved by the FDA based on this one study. Cost of Plavix/day=$6.50. Cost of aspirin/day = $1.33
• What was the NNT?
• How much does Plavix® cost monthly?
• What meaning do these values have for this problem?
• Be sure to include your actual calculations/math
i n t e r n a t i o n a l j o u r n a l o f m e d i c a l i n f o r m a t i c s 7 9 ( 2 0 1 0 ) 736–771
j o u r n a l h o m e p a g e : w w w . i n t l . e l s e v i e r h e a l t h . c o m / j o u r n a l s / i j m i
Effectiveness of telemedicine: A systematic review of
reviews
Anne G. Ekeland a,∗, Alison Bowes b, Signe Flottorp c,d
a Norwegian Centre for Integrated Care and Telemedicine, University Hospital of North Norway, P.O. Box 6060, N-9038 Tromsø, Norway
b Department of Applied Social Science, University of Stirling, Scotland, UK
c Norwegian Knowledge Centre for the Health Services, Oslo, Norway
d Department of Public Health and Primary Health Care, University of Bergen, Norway
a r t i c l e i n f o
Article history:
Received 23 April 2010
Received in revised form
11 July 2010
Accepted 29 August 2010
Keywords:
Telemedicine
Telecare
Systematic review
Effectiveness
Outcome
a b s t r a c t
Objectives: To conduct a review of reviews on the impacts and costs of telemedicine services.
Methods: A review of systematic reviews of telemedicine interventions was conducted. Inter-
ventions included all e-health interventions, information and communication technologies
for communication ...
1. Find something to negotiate in your personal or professional liMartineMccracken314
1. Find something to negotiate in your personal or professional life. Examples include: redistribution of household chores, a personal or professional purchase, a contract at work, asking for a raise, booking a vacation, hiring a contractor, etc. The deal does not have to be implemented for the purposes of this class (e.g. you can finalize the price for something you’re thinking of buying without following through on the purchase right now). The scenario you choose should be significant enough to allow you to do substantial research and detail for your paper. Submit a five page paper (minimum), double spaces, utilizing proper grammar and spelling, which summarizes the following:
1. Your Preparation – Describe the process you used and results of your preparation. You should also discuss your strategies, targets, and negotiating plan. Make sure you do your research, working on both your BATNA and the other party’s. (Consider newspapers, bookstores, libraries, the internet, and personal calls and visits as possible sources of information). This is the most important step, so being thorough is critical.
1. The Negotiating Process – Describe what happened in the negotiation itself. List he sequence of events and how you reacted/adjusted to the other party’s position. What was the negotiation style of the other party? What “tricks” did they try? How did you react? Were there any other influencing factors (e.g. cultural differences, misperceptions, emotion, etc.)?
1. The Outcome – What was the outcome and how did you feel about it? What worked well? What would you have done differently? Do you feel the result you arrived at was better than it would have been if you hadn’t taken the class? Why/Why not?
Your understanding of the appropriate preparation and process steps to take in negotiating this deal is more important than the final outcome.
Be sure to cite your sources, and include copies of necessary quotes/documentation.
1.
Find something to negotiate in your personal or professional life. Examples include:
redistributi
on of household chores, a personal or professional purchase, a contract at work,
asking for a raise, booking a vacation, hiring a contractor, etc. The deal does not have to be
implemented for the purposes of this class (e.g. you can finalize the price for
something you’re
thinking of buying without following through on the purchase right now). The scenario you
choose should be significant enough to allow you to do substantial research and detail for your
paper. Submit a five page paper (minimum), double
spaces, utilizing proper grammar and
spelling, which summarizes the following:
2.
Your Preparation
–
Describe the process you us
ed and results of your preparation. You should
also discuss your strategies, targets, and negotiating plan. Make sure you do your research,
working on both your BATNA and the other party’s. (Consider newspapers, bookstores, libraries,
the internet, and p
ers ...
1. FAMILYMy 57 year old mother died after a short illness MartineMccracken314
1. FAMILY
My 57 year old mother died after a short illness last June. She was a wonderful mother and my 66 year old father
adored her. They had been married for 38 years. He is finding it extremely difficult to cope without her. To make
matters worse, he retired just two months before she died and is at a loss to fill his days.
He is disorganized and has not established any pattern in his life. I invite him for meals and outings, but he is
detached and depressed. He doesn’t seem to be part of the world any more. I am terribly worried about him. How
long will he be like this? I am 34 and have small children. I thought being with the children would help him, but it’s
as though he doesn’t see or know them. He just sits and stares into space for much of the day. He seems locked
into his grief.
2. FAMILY
One of our 17 year old son’s best friends took his life several months ago. Our son didn’t say much at the time, but
he was very shaken. Since then he has gradually “retired” into himself. He stays in his room most of the time
listening to rock music.
He is unemployed and no longer sees his former schoolmates. We are very worried about him. How do we get him
out of himself? He has always been a quiet guy but his present behavior is beyond “quiet.” We have two other
children, girls aged 13 and 10, but our son now just ignores them.
3. FAMILY - rural
Ken is a 67 year old farmer who lives with his wife Margaret. Ken and Margaret had hoped to retire late in their 60s
and move to the west coast to be closer to their children, reluctantly selling the family property that has been
struggling financially. They have limited investment funds set aside to support their retirement and have been told
it is unlikely that they would be successful in selling their farm. Ken also suffers chronic back pain from a previous
farm injury. A neighbor has become concerned about Ken’s ability to cope with his property, and has visited Ken
and Margaret a number of times due to problems with his stock and pasture management. Margaret believes the
farm is “too much for them now,” but feels she can’t talk to Ken about this. Ken has become withdrawn and
refuses to discuss the issue. He talks about there being “no way out of this,” and that it “might as well be over.” He
sees his physician infrequently, having difficulty traveling the 60 miles to the nearby town.
4. FAMILY - rural
Jason is 34 years old and lives with his wife Jenny and their two children (8 and 3 years old). After completing a
mechanical trade apprenticeship in Boston, he has returned home with plans to build his future as a farmer. He has
become increasingly irritable and frustrated with what he believes is his failure to “get on top of things” on the
farm, and they are struggling to manage financially.
Jason is drinking heavily, mostly at home, but still drives his car into town. Jenny is angry and worried about this.
She is feeling isolated, having few friends in the area, and relying on Jas ...
1. Explain the four characteristics of B-DNA structure DifferentiMartineMccracken314
1. Explain the four characteristics of B-DNA structure? Differentiate between the A-DNA and Z-DNA structural features?
2. Describe the supercoiled DNA with its properties and how naturally occurring DNA under wound?
3. What are topoisomerases? Explain the two types of topoisomerases with their mechanism of action?
4. Explain the three interactions that are required to stabilize nucleic acids? How DNA denatures and renatures?
5. What are ribozymes and explain their properties?
Case 20 Restructuring
General Electric
The appointment of Larry Culp as the chairman and CEO of the General Electric
Company (GE) on October 1st, 2018 was a clear indication of the seriousness of the
problems that had engulfed the company. Culp, the former CEO of the highly-successful
conglomerate, Danaher Corporation, had been appointed a GE director only six months
previously and was the first outsider to lead GE—every one of GE’s previous CEOs had
been a career manager at the company. On the same day as Culp’s appointment, GE
abandoned its earning guidance for the year and announced a $23 billion accounting
charge arising from a write-down of goodwill at its troubled electrical power division.1
Culp’s predecessor, John Flannery had been CEO for a mere 14 months—a sharp
contrast to GE’s two previous CEOs: Jeff Immelt (16 years) and Jack Welch (20 years).
Flannery’s tenure at GE has coincided with of the company’s most difficult periods in its
entire 126-year history. In November 2017, amidst deteriorating financial performance,
Flannery announced a halving of GE’s quarterly dividend, the proposed sale of its
lighting and locomotive units—two of GE’s oldest businesses—and the elimination of
12,000 jobs in the power division.
In 2018, the situation worsened. In January, GE announced that it would be paying
$15 bn. to cover liabilities at insurance companies it had sold 12 years previously. In
February, GE confirmed suspicions over its dubious accounting practices by restating its
revenues and earnings for the previous two years, while also announcing the likelihood
of legal claims arising from its its subprime mortgage lending over a decade earlier.
The outcome was a precipitous fall in GE’s share price (see Figure 1) that culminated
in GE’s dismissal from the Dow Jones Industrial Average (DJIA). Until June 2018, GE
was the sole surviving member of the DJIA when it was created in 1896.
The crisis at GE presented the board with two central questions. First, should GE
be broken up? Second, if GE was to continue as a widely-diversified company, how
should it be managed?
As a diversified corporation that extended from jet engines, to oil and gas equipment,
to healthcare products, to financial services, GE was an anomaly. For three decades, con-
glomerates—diversified companies comprising unrelated or loosely related businesses—
had been deeply unfashionable. CEOs, Jack Welch and Jeff Immelt, had claimed that,
by virtue of its integrated m ...
1. examine three of the upstream impacts of mining. Which of theseMartineMccracken314
1. examine three of the upstream impacts of mining. Which of these do you think would be most difficult to estimate in a life cycle assessment?
Your response should be at least 250 words in length.
2. Discuss the pollutants that are emitted during the operation stage of a life cycle assessment for a fossil fuel source.
Your response should be at least 250 words in length
Body Ritual among the Nacirema
H O R A C E M I N E R
University of Michigan
HE anthropologist has become so familiar with the diversity of ways iq T which different peoples behave in similar situations that he is not a p t to.
be surprised by even the most exotic customs. I n fact, if all of thelogically
possible combinations of behavior have not been found somewhere in the
world, he is a p t to suspect that they must be present in some yet undescribed
tribe. This point has, in fact, been expressed with respect to clan organization
by Murdock (1949: 7 1 ) . I n this light, the magical beliefs and practices of the
Nacirema present such unusual aspects that i t seems desirable t o describe
them a s an example of the extremes to which human behavior can go.
Professor Linton first brought the ritual of the Nacirema to the attention
of anthropologists twenty years ago (1936:326), but the culture of this people
is still very poorly understood. They are a North American group living in the
territory between the Canadian Cree, the Yaqui and Tarahumare of Mexico,
and the Carib and Arawak of the Antilles. Little is known of their origin, al-
though tradition states that they came from the east. According to Nacirema
mythology, their nation was originated by a culture hero, Notgnihsaw, who is
otherwise known for two great feats of strength-the throwing of a piece of
wampum across the river Pa-To-Mac and the chopping down of a cherry tree
in which the Spirit of Truth resided.
Nacirema culture is characterized by a highly developed market economy
which has evolved in a rich natural habitat. While much of the people’s time
is devoted to economic pursuits, a large part of the fruits of these labors and a
considerable portion of the day are spent in ritual activity. The focus of this
activity is the human body, the appearance and health of which loom a s a
dominant concern in the ethos of the people. While such a concern is certainly
not unusual, its ceremonial aspects and associated philosophy are unique.
The fundamental belief underlying the whole system appears to be that the
human body is ugly and that its natural tendency is t o debility and disease.
Incarcerated in such a body, man’s only hope is to avert these characteristics
through the use of the powerful influences of ritual and ceremony. Every house-
hold has one or more shrines devoted to this purpose. The more powerful in-
dividuals in the society have several shrines in their houses and, in fact, the
opulence of a house is often referred to in terms of the num ...
1. Examine Hofstedes model of national culture. Are all four dimeMartineMccracken314
1. Examine Hofstede's model of national culture. Are all four dimensions still important in today's society as it relates to the success of the multinational manager? Why, or why not? Which do you think is the least important as it relates to multinational management? Why?
2. More companies are seeking to fill multinational management positions due to the influx of business growth abroad. If you were offered and accepted a position as a multinational manager, what would you do to personally prepare for the culture of a different country? Where would you seek information? What overall responsibilities would you expect of the job? How do you think the managerial responsibilities would be different from those you would face in the United States?
3. Multinational managers encounter many levels of culture. Which of the culture levels do you think might be the most difficult to manage? Why? Share an example. Which culture level do you think might be the easiest to understand? Why? Give an example of this.
4. In your own words, what is your perception of free trade? Think about the advantages of free trade; what are two benefits that result from free trade? There is also a downside to free trade; what are two disadvantages resulting from free trade? Provide reasoning for your choices.
5. What are the three major economic systems that nations utilize, and what is the role of each? How does each affect and influence individuals, multinational managers, and corporations?
6. How would you define ethical convergence? What are the four basic reasons for ethical convergence? Which might be the most difficult for multinational companies to follow, and why?
7. Describe the four major world religions. What are the impacts of each religion type on an economic environment? What do you think makes religion a concern in societies?
8. If you were a multinational manager, and you encountered an ethical dilemma within the multinational company, what heuristic questions would you use to decide between ethical relativism and ethical universalism? Of the different heuristic questions, which one do you think is most important? Explain your reasoning.
1
Week Two Instructor’s Notes
PHIL 1103 Summer
This week you will be learning in detail about the four different moral perspectives that
we will use to analyze moral questions.
Notice two things right at the start. First, because normative ethics is our main focus this
term, we are not going to attempt to settle the question of whether any moral perspective at all
could be correct or known to be correct—that is a task for metaethics. Our task in this second
week is to learn in some detail about four different kinds of consideration or value that often
seem relevant when we try to decide what is morally right or wrong in particular cases, namely:
(1) Respect for the rights and autonomy of the persons involved
(2) Increasing the overall well-being of the most individuals possible
(3) Asking wha ...
How to Split Bills in the Odoo 17 POS ModuleCeline George
Bills have a main role in point of sale procedure. It will help to track sales, handling payments and giving receipts to customers. Bill splitting also has an important role in POS. For example, If some friends come together for dinner and if they want to divide the bill then it is possible by POS bill splitting. This slide will show how to split bills in odoo 17 POS.
Students, digital devices and success - Andreas Schleicher - 27 May 2024..pptxEduSkills OECD
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The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
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1-Base-CaseTool KitChapter 11112118Note Calculations are automa
1. 1-Base-CaseTool KitChapter 1111/21/18Note: Calculations are
automatic, including for tables. This will make the calculations
take longer to complete. You can disable automatic calculations
for tables by following the steps shown here.Cash Flow
Estimation and Risk AnalysisWorksheet 1-Base-CaseThis
worksheet contains the base-case model. It calculates an
expansion project's cash flows and performance measures using
base-case, or most likely, values for the input variables. It also
includes the basic analysis but with straight-line depreciation
and bonus depreciation.Go to the menu "Files" at the top left of
the menu bar.Select "Options" from the items in the first
column.This will give you the screen shown below:The second
worksheet (2-Sens) extends the basic model to include
sensitivity analysis using Data Tables (we include a brief
tutorial on the use of Data Tables). Worksheet 2-Sens also
illustrates special cases of sensitivity analysis, including
breakeven analysis, one-way data tables with multiple outputs,
and two-way data tables.Worksheet 3a-Sens extends the basic
model to include scenario analysis. Worksheet 3b-ScenMgr
shows how to use Excel's Scenario Manager for scenario
analysis.Worksheet 4-Sim extends the basic model to include
simulation analysis. Worksheet 5-Replmt illustrates the
analysis for a proposed cost-reducing replacement investment.
Replacement decisions differ from expansion decisions because
most of the cash flows are found by subtracting the old project's
cash flows from those of the new project to calculate
incremental cash flows for use in the analysis.Worksheet 6-
DecTree extends the scenario analysis to examine two decision
trees in which the decision is made in stages. The first one
simply shows the situation where the firm can abandon the
project if things are not working out and cash flows are
negative. The second one involves a marketing study and a
prototype of the final product designed to learn more about
demand before deciding to go into full production.Worksheet
2. Appendix 11-A provides depreciation tables as described in
Appendix A of the textbook. It also shows examples using
straight-line depreciation and bonus depreciation.11-1
Identifying Relevant Cash FlowsA proposal’s relevant project
cash flows are the differences between the cash flows the firm
will have if it implements the project versus the cash flows it
will have if it rejects the project. These are called incremental
cash flows.Choose "Formulas" in the first column.11-2 Analysis
of an Expansion ProjectThis will give you the screen shown
below.The figure below shows the inputs and key results of
Project L (one of the projects whose cash flows are used in the
previous chapter); the actual analysis is conducted further
below in the worksheet. The values in the Inputs section are
linked to the model, as are the values shown in Key Results. If
you change any of the values in the Input Section, the model
recalculate almost instantly, causing changes in NPV and other
output variables. You can see the effect in the Key Results box
shown above. If you change an input value but later want to
return to the base case, use Scenario Manager to select the
Base-Case. In Excel 2016, select Data, What-If-Analysis,
Scenario Manager.11-2a Base Case Inputs and Key
ResultsFigure 11-1Analysis of an Expansion Project: Inputs and
Key Results (Dollars in Thousands)Part 1. Inputs and Key
ResultsScenario:InputsBase-CaseKey Results Equipment
cost$10,000NPV $1,070Salvage value, equipment, Year
4$1,000IRR13.8%Opportunity cost$0MIRR12.4%Externalities
(cannibalization)$0PI1.09Units sold, Year
110,000Payback2.94Units sold, Year 2, Pct. change from Year
120%Discounted payback3.65Units sold, Year 3, Pct. change
from Year 220%Units sold, Year 4, Pct. change from Year
3−30%Sales price per unit, Year 1$2.00Annual change in sales
price, after Year 14%Variable cost per unit (VC), Year
1$1.56Annual change in VC, after Year 13%Nonvariable cost
(Non-VC), Year 1$1,107Annual change in Non-VC, after Year
13%Project WACC10%Tax rate25%The first panel is
"Calculation options". Working capital as % of next year's
3. sales10%Choose "Automatic except for data tables". Remember
to repeat this process and select Automatic when you are using
data tables.The model uses the "Base-Case" input values shown
below to calculate the NPV and other performance measures.
The model assumes that the firm correctly incorporates
inflation in prices and costs. The base-case model uses MACRS
for depreciation. Use Scenario Manager to see the results if
straightline depreciation or bonus depreciation are used.11-2b
through 11-2d: Cash Flow Projections: Intermediate
Calculations, Estimating Net Operating Profit After Taxes
(NOPAT), and Completing the CalculationsFigure 11-2 Analysis
of a New (Expansion) Project: Cash Flows and Performance
Measures
(Dollars in Thousands)Part 2. Cash Flows and Performance
MeasuresScenario:Base-CaseIntermediate
Calculations01234Unit sales10,00012,00012,0007,000Sales
price per unit$2.000$2.080$2.163$2.250Variable cost per unit
(excl. depr.)$1.560$1.607$1.655$1.705Nonvariable costs (excl.
depr.)$1,107$1,140$1,174$1,210Sales revenues = Units ×
Price/unit$20,000$24,960$25,958$15,748NOWCt =
15%(Revenuest+1)$2,000$2,496$2,596$1,575$0Basis for
depreciation$10,000Annual depreciation rate
(MACRS)33.33%44.45%14.81%7.41%Annual depreciation
expense$3,333$4,445$1,481$741Remaining undepreciated value
(book value)$6,667$2,222$741$0Forecast Project Cash
Flows01234Sales revenues = Units ×
Price/unit$20,000$24,960$25,958$15,748Variable costs =
Units × Cost/unit$15,600$19,282$19,860$11,933Nonvariable
costs (excluding
depr.)$1,107$1,140$1,174$1,210Depreciation$3,333$4,445$1,4
81$741Earnings before int. and taxes
(EBIT)−$40$93$3,443$1,865Taxes on operating profit (25%
rate)−$10$23$861$466Net operating profit after
taxes−$30$70$2,582$1,39901234Net operating profit after
taxes−$30$70$2,582$1,399Add back
depreciation$3,333$4,445$1,481$741Equipment
4. purchases−$10,000Salvage value$1,000Cash flow due to tax on
salv. val.−$250Cash flow due to change in
NOWC−$2,000−$496−$100$1,021$1,575Opportunity cost, after
taxes$0$0$0$0$0After-tax externalities$0$0$0$0Project cash
flows: Time Line−$12,000$2,807$4,415$5,084$4,464Project
Evaluation MeasuresNPV
$1,070=NPV(E71,F116:I116)+E116IRR13.75%=IRR(E116:I116
)MIRR12.37%=MIRR(E116:I116,E71,E71)Profitability
index1.09=NPV(E71,F116:I116)/(-
E116)Payback2.94=PERCENTRANK(E125:I125,0,6)*I124Note:
see Ch 10 Tool Kit.xls for a detailed explanation of how to use
the PERCENTRANK function to calculate payback.Disc.
payback3.65=PERCENTRANK(E127:I127,0,6)*I124Calculation
s for PaybackYear:01234 Cumulative cash flows for
payback−$12,000−$9,193−$4,778$306$4,771 Disc. cash flows
for disc. payback−$12,000$2,552$3,649$3,820$3,049
Cumulative discounted cash
flows−$12,000−$9,448−$5,799−$1,980$1,070Taxation of
SalvageSuppose GPC terminates operations before the
equipment is fully depreciated. The after-tax salvage value
depends upon the price at which GPC can sell the equipment
and upon the book value of the equipment (i.e., the original
basis less all previous depreciation charges). See below for
calculations of yearly book values.Year:1234Beginning book
value$10,000.0$6,667.0$2,222.0$741.0Depreciation$3,333.0$4,
445.0$1,481.0$741.0Ending book
value$6,667.0$2,222.0$741.0$0.0If GPC terminates at Year 2
and can sell the equipment for $2,170, what is the after-tax
salvage cash flow? What if GPC can only sell the equipment for
$522 at Year 2?Case 1: GainCase 2: LossMarket value when
salvaged at Year 2$2,570.0$522.0Book value when salvaged at
Year 2$2,222.0$2,222.0Expected gain or loss$348.0-
$1,700.0Tax expense (credit)$87.0-$425.0Cash from
sale$2,570.0$522.0Tax expense (credit)$87.0-$425.0Net cash
flow from salvage$2,483.0$947.0 In Case 1, the sales price is
greater than the book value. Here the depreciation charges
5. exceeded the "true" depreciation, and the difference is called
"depreciation recapture." It is taxed as ordinary income. In
Case 2, the sales price is less than the book value. This
represents a shortfall in depreciation taken versus "true"
depreciation, and it is treated as an operating expense at the
time of the sale. Because it is a noncash expense, it reduces the
company's overall tax bill. In other words, it acts as a tax credit
if the company has other taxable income. The actual book value
at the time of disposition depends on the month of disposition.
We have simplified the analysis and assumed that there will be
a full year of depreciation. The Impact of Omitting InflationTo
determine the impact if inflation is incorrectly omitted, the
easiest way is to change the inputs for inflation to zero. And the
easiest way to do this is to use Excel's Scenario Manager. Open
Data, What-If-Analysis, and Scenario Manager. Pick the
scenario that has no inflation and click "Show." You can get the
original inputs back by repeating the process by select the base-
case scenario and click "Show."Current Scenario:Base-CaseNPV
based on current scenario:$1,070Value of NPV in Base-
Case:$1,070Value of NPV in Base-Case but Ignore
Inflation:$131The Impact of Different Depreciation MethodsThe
base-case uses MACRS to determine annual depreciation
expenses. To determine the impact if inflation is incorrectly
omitted, the easiest way is to change the inputs for inflation to
zero. And the easiest way to do this is to use Excel's Scenario
Manager. Open Data, What-If-Analysis, and Scenario Manager.
Pick the scenarios that have MACRS depreciation (or Bonus
depreciation or Straight-line depreciation) and click "Show."
You can get the original inputs back by repeating the process by
select the base-case scenario and click "Show."Value of NPV if
Use MACRS Depreciation:$1,070Value of NPV if Use Bonus
Depreciation:$1,262Value of NPV if Use Straight-Line
Depreciation:$967
2-Sens11/21/18Worksheet 2-Sensitivity AnalysisThis worksheet
extends the basic model (shown in Tab 1-Base-Case) to include
sensitivity analysis. This worksheet also illustrates special cases
6. of sensitivity analysis, including breakeven analysis, one-way
data tables with multiple outputs, and two-way data tables. We
also include a brief tutorial for Data Tables.For ease of
reference, we repeat Figure 11-1, Analysis of an Expansion
Project: Inputs and Key Results (Dollars in Thousands)Figure
11-1 (Repeated Here for Convenience)Analysis of an Expansion
Project: Inputs and Key Results (Dollars in Thousands)Part 1.
Inputs and Key ResultsInputsBase-CaseKey Results Equipment
cost$10,000NPV $1,070Salvage value, equipment, Year
4$1,000IRR13.75%Opportunity
cost$0MIRR12.37%Externalities
(cannibalization)$0PI1.09Units sold, Year
110,000Payback2.94Units sold, Year 2, Pct. change from Year
120%Discounted payback3.65Units sold, Year 3, Pct. change
from Year 220%Units sold, Year 4, Pct. change from Year
3−30%Sales price per unit, Year 1$2.00Annual change in sales
price, after Year 14.00%Variable cost per unit (VC), Year
1$1.56Annual change in VC, after Year 13%Nonvariable cost
(Non-VC), Year 1$1,107Annual change in Non-VC, after Year
13%Project WACC10%Tax rate25%Working capital as % of
next year's sales10%The model uses the "Base-Case" input
values shown below to calculate the NPV and other performance
measures. The model assumes that the firm uses accelerated
depreciation; a modified version of the model, shown to the
model's right, shows the results if the firm elects to use
straight-line depreciation. This analysis demonstrates that
accelerated depreciation improves project profitability.Figure
11-2 (Repeated Here for Convenience)Analysis of a New
(Expansion) Project: Cash Flows and Performance Measures
(Dollars in Thousands)Part 2. Cash Flows and Performance
MeasuresScenario:Base-CaseIntermediate
Calculations01234Unit sales10,00012,00012,0007,000Sales
price per unit$2.00$2.08$2.16$2.25Variable cost per unit (excl.
depr.)$1.56$1.61$1.66$1.70Nonvariable costs (excl.
depr.)$1,107$1,140$1,174$1,210Sales revenues = Units ×
Price/unit$20,000$24,960$25,958$15,748NOWCt =
7. 15%(Revenuest+1)$2,000$2,496$2,596$1,575$0Basis for
depreciation$10,000Annual depreciation rate
(MACRS)33.33%44.45%14.81%7.41%Annual depreciation
expense$3,333$4,445$1,481$741Remaining undepreciated
value$6,667$2,222$741$0Cash Flow ForecastCash Flows at End
of Year01234Sales revenues = Units ×
Price/unit$20,000$24,960$25,958$15,748Variable costs =
Units × Cost/unit$15,600$19,282$19,860$11,933Nonvariable
costs (excluding
depreciation)$1,107$1,140$1,174$1,210Depreciation$3,333$4,4
45$1,481$741Earnings before interest and taxes
(EBIT)−$40$93$3,443$1,865Taxes on operating profit (40%
rate)−$10$23$861$466Net operating profit after
taxes−$30$70$2,582$1,399Add back
depreciation$3,333$4,445$1,481$741Equipment
purchases−$10,000Salvage value$1,000Cash flow due to tax on
salvage value (25% rate)−$250Cash flow due to change in
WC−$2,000−$496−$100$1,021$1,575Opportunity cost, after
taxes$0$0$0$0$0After-tax cannibalization or complementary
effect$0$0$0$0Project cash flows: Time
Line−$12,000$2,807$4,415$5,084$4,464Project Evaluation
MeasuresNPV $1,070IRR13.75%MIRR12.37%Profitability
index1.09Payback2.94Discounted payback3.65Calculations for
PaybackYear:01234 Cumulative cash flows for payback-
$12,000-$9,193-$4,778$306$4,771 Discounted cash flows for
disc. payback-$12,000$2,552$3,649$3,820$3,049 Cumulative
discounted cash flows-$12,000-$9,448-$5,799-$1,980$1,07011-
5 Sensitivity AnalysisRisk in capital budgeting really means the
probability that the actual outcome will be worse than the
expected outcome. For example, if there were a high probability
that the expected NPV as calculated above will actually turn out
to be negative, then the project would be classified as relatively
risky. The reason for a worse-than-expected outcome is,
typically, because sales were lower than expected, costs were
higher than expected, or the project turned out to have a higher
than expected initial cost. In other words, if the assumed inputs
8. turn out to be worse than expected, then the output will likewise
be worse than expected. We use data tables below to examine
the project's sensitivity to changes in the input
variables.Following is a tutorial for constructing a Data Table
to be used in sensitivity analysis. This section may be skipped if
you already know how to construct data tables.Instructions for
Constructing Data Tables:Step 1:Sales Set up the Data Table
by typing in the labels shown here. You don't need to shade the
areas, but we did because it will help us explain where other
values and formulas go. The purple area defines how much each
input (the sales price per unit in this example) will deviate from
the base case value. The light blue cells will show the inputs
that correspond to the deviations. The orange cells will show
the results, which will be the NPV for each different input
value. We explain the other cells in the next step.
DeviationPrice/unitNPVfrom Base-30%0%30%Step 2:Sales
Type the actual number in the green cell for the base case value
of the input, which is an intial sales price of $2.00. Be sure to
type in the actual sales price of $2.00 and not a formula. Every
year we have students who make this mistake! Don't be one of
them!
If you type in a fomula in the green cell that is a link back to
the Part 1 Inputs at the top of this sheet, your data table will
have a circular reference and will not give you the correct
results. We repeat: Type in the actual sales price of $2.00 and
not a formula.DeviationPrice/unitNPVfrom Base$2.00-
30%0%30%Step 3:Sales Enter the formula =$B$121*(1+A122)
into the light blue range's (the input range's) first cell, B122.
Notice that the formula will multiply the base-case value of the
input (which is shown as a number in B121, not a formula in
B121) and use the deviation in the purple range to create a new
input value in the light blue range. It is ok to have a formula in
the input range, but be sure that none of these formulas is
linked back to the Part 1 Inputs at the top of this
sheet.DeviationPrice/unitNPVfrom Base$2.00-
30%$1.400%30%Step 4:Sales Copy the formula in the input
9. (light blue) range's top cell down for the other cells in the input
(light blue) range. This will give inputs the match the
deviations in the purple range. Note: We changed the formula to
be =$B$128*(1+A130) so that the table in Step 4 would be
correct; if we had applied all these steps to a single data table
instead of a different table for each Step, then we would not
have had to change the formula. DeviationPrice/unitNPVfrom
Base$2.00-30%$1.400%$2.0030%$2.60Step 5:Sales Enter
into the bright yellow cell a formula that refers to the desired
output cell in the section at the top of the sheet for Part 1 Key
Results. We want NPV, so we the formula is: =$I$15. Notice
that the bright yellow cell will show the current value of NPV.
Be sure that none of the formulas in the blue input cells
refers back to the cell for sales at the Part 1 Inputs section at
the top of the sheet. If it does, the resulting data table will have
a circular reference.DeviationPrice/unitNPVfrom
Base$2.00$1,070-30%$1.400%$2.0030%$2.60Step 6:Sales
Now use your cursor to highlight the range we show in gray
(this is called the Data Table range); notice that this highlighted
range includes the previous green cell (which contains the
actual number for sales price), the previous yellow cell cell
(which had a link to the desired output value), the previous light
blue cells (which have the inputs for the data table), and the
previous orange cells (which will be for the data table's
outputs).DeviationPrice/unitNPVfrom Base$2.00$1,070-
30%$1.400%$2.0030%$2.60With the range still highlighted,
open the Table dialog box. In Excel for Windows, select Data,
What-If-Analysis, then Data Table. You will get the dialog box
shown below.This next step is a bit tricky, so be careful. The
cursor in the dialog box will be blinking in the "Row input
cell:" box. Here you have to tell Excel if the inputs in your
Data Table are arranged in a row or a column. Excel assumes a
row, but this is not correct in our example--your inputs are in a
column, Column B. So, you click on the "Column input cell"
box, causing the cursor to blink in that box.Excel wants to know
where the input variable, sales price, first "enters" the model.
10. If you look at the Part 1 Input Data section at the top of the
worksheet, you will see that it enters in cell E23, so you type
E23 in the Column input cell (or click on cell E23 to enter it).
Here's the final, completed, dialog box:When you click OK,
Excel will calculate NPV at the three input values specified in
your Data Table, insert them in the table, leaving the Data Table
as shown below.Step 7:SalesDeviationPrice/unitNPVfrom
Base$2.00$1,070-30%$1.40-
$14,2640%$2.00$1,07030%$2.60$16,403We used Data Tables
to create inputs for the sensitivity graph. (First, be sure the
Base-Case scenario is showing.) Note that the portion of the
rows that are in the Data Tables are shown in shaded colors. We
made one change to make it easier. By carefully using the
permanent cell reference in the formula in B198, we can simply
copy this formula into the other data tables and only use 1
column for deviation.Deviation
Mike Ehrhardt: Change the cells below to get different
deviations. All other inputs will be updated
automatically.EquipmentNPVUnit SalesNPVSales
Price/unitNPVVC/UnitNPVfrom
Base$10,000$1,07010,000$1,070$2.00$1,070$1.56$1,070-
30%$7,000$3,4467,000-$2,2961.40-
$14,264$1.09$13,0370%$10,000$1,07010,000$1,0702.00$1,070
$1.56$1,07030%$13,000-$1,30613,000$4,4362.60$16,403$2.03-
$10,898Range =$4,752Range =$6,732Range =$30,667Range
=$23,935The following graph is meaningful only if the scenario
is set to the Base-Case.Figure 11-3 Sensitivity Graph for Solar
Water Heater Project (Dollars in Thousands)Data for Sensitivity
Graph DeviationNPV with Variables at Different Deviations
from Basefrom
BaseEquip.PriceUnitsVC/Unit−30%$3,446−$14,264−$2,296$13,
0370%$1,070$1,070$1,070$1,07030%−$1,306$16,403$4,436−$
10,898Range$4,752$30,667$6,732$23,935Tornado
DiagramsTornado diagrams are another way to present results
from sensitivity analysis. A tornado shows the range of
11. outcomes caused by changes in each input variable in graphic
form, with the input variable causing the widest range shown at
the top of the chart and the input variable causing the smallest
range at the bottom, which makes the chart look like a
tornado.The good news is that a tornado diagram makes it
immediately obvious which inputs have the biggest impacts on
NPV. The bad news is that there is no way to create a tornado
diagram in Excel directly from the results of a sensitivity
analysis. An intermediate step is required, as we describe
below.The first step is to rank the range of possible NPV's for
each of the input variables that is being changed. We used the
RANK function, as shown in the rose-colored area below. In our
example, the range for sales price/unit is the largest and the
range for the equipment cost is the smallest. In the yellow
figure below, we created an XY scatter chart with four series
(Equipment, Price, Units, and VC/Unit). Each series has 3
observations. The X-values for each series are the NPVs shown
in the olive green range (these correspond to the -30%, 0%, and
30% deviations of the inputs). The Y-values for each series are
its corresponding rank in the range of NPVs (with the same rank
repeated for all 3 X-values, shown in the aqua region below).
To summarize, each variable is plotted so that its "width" on the
X-axis is determined by the impact it has on NPV, and its
"height" on the chart (the Y-axis) determined by the input's rank
in terms of the NPV's sensitivity.It is helpful to also plot a
vertical line showing the base-case NPV. To do this, we have all
3 X-values equal to the base-case NPV and let the
corresponding Y-values go from the lowest rank to the highest
rank (shown in the bright yellow area below.) In the final
presentation of the tornado diagram below, we set the vertical
axis to cross the horizontal axis at the maximum vertical value
(i.e., we put the X-axis at the top of the chart instead of at the
bottom). For the vertical axis (the Y-axis), we checked "None"
for tick marks and for labels, so the chart doesn't show this axis.
Finally, we formatted the "right" data points for each series to
show the series name. These changes are purely cosmetic in
12. nature.The advantage of this method is that the chart below will
update automatically if you change the model (and also update
the data tables). For a slightly less complicated approach that
requires manual intervention, see the example to the
right.Additional data for Tornado DiagramRepeated from above
for convenience:NPV with Variables at Different Deviations
from BaseEquip.PriceUnitsVC/UnitX-values for diagram
below$3,446−$14,264−$2,296$13,037$1,070$1,070$1,070$1,07
0−$1,306$16,403$4,436−$10,898Rank of Range of NPV from
Sensitivity Table AboveScratch for Tornado Diagram Below
Mike Ehrhardt: This puts in the dotted vertical line in the
tornado diagram showing how the outcomes compare to the base
case.EquipmentPriceUnitsVC/UnitRange$4,752$30,667$6,732$
23,935Base NPV =Y-axisRank1423$1,0705Y-values for
diagram below14231,070414231,07011423Figure 11-4 Tornado
Diagram for Solar Water Heater Project: Range of Outcomes for
Input Deviations from Base-Case (Dollars in Thousands)Note:
this is an XY scatterplot, with four data series (one for each
input varaible being analyzed. Each data series has 3
observations corresponding to the 3 deviations in the data
tables. The X-values for a data series are its NPV's for each
deviation. A data series' Y-values are the same for each of its 3
observations are equal the rank of the data series NPV range
relative to the NPV ranges of the other data series. For example,
the rank of the data series for the Price variable is 4 for each of
its observations because Price has the highest ranked range in
NPVs compared to the other input variables.NPV Breakeven
AnalysisIn breakeven analysis, we find the value of the input
variable that produces a zero NPV. It is easiest to do this with
Goal Seek. For example, the screen shot below shows the Goal
Seek inputs we used to set the cell for NPV to a value of zero
by changing the cell for the sales price. The result was $1.96.
We repeated this for the other inputs and report these results in
the table below.Table 11-1 NPV Break-Even Analysis (Dollars
in Thousands)Input Value that Produces Zero
13. NPVInputEquipment$11,351Units sold, Year 19047Sales price
per unit, Year 1$1.96Variable cost per unit (VC), Year
1$1.60Nonvariable cost (Non-VC), Year 1$1,539Project
WACC14.47%Data Tables: Multiple Outputs for a Single
InputNPV Breakeven Analysis (Dollars in Thousands)Data
tables can easily be extended to show multiple outputs for a
single input. Simply add an additional column with a cell
reference to the desired additional output. Highlight the
specified values for the input and highlight all the columns for
the output as we show shaded in gray below (be sure to also
highlight the cells above the outputs). Then use the Data,
Tables, and set "Column input" to the cell reference of the
desired input. Example: NPV and IRR for Changes in Sales
Price% DeviationSALES PRICEfromSales PriceNPVIRRBase
Case$2.00$1,07013.8%-30%$1.40-$14,264Not found-
15%$1.70-$6,597-
16.8%0%$2.00$1,07013.8%15%$2.30$8,73637.9%30%$2.60$16
,40358.9%Two-Way Data Tables: Two Inputs and One
OutputData tables can also be extended to show the output
given two inputs. Put one set of input variables in the left-most
column of the data table (shown in a red font below) and the
other set of inputs in the top row of the data table (shown in
purple font); put the cell reference to the output you want (like
NPV) in the intersection of the row and column for inputs (we
show this in a green font). Highlight the range that includes the
specified values for the inputs, as shown in the gray shaded
region below (this will also highlight the cell reference for the
output). Then use the Data, Tables, and set "Row input" to the
cell reference for the inputs shown in the table's row E19 for
units sold) and set "Column input" to the cell reference for the
input shown in the table's column E21 for sales price). Example:
NPV for Changes in Sales Price and Units SoldBase case units
sold =10,000Base case sales price =$2.00% Deviation from
Base Case-30%-15%0%15%30%% Deviation fromNPV cell
referenceUnits SoldBase
Case$1,0707,0008,50010,00011,50013,000-30%Sales
15. VC/Unit
13037.131695068645 1069.7676359196739 -
10897.59642322929 3 3 3 Equip.
Equip.
3445.5903427019985 1069.7676359196739 -
1306.0550708626506 1 1 1 Base NPV =
Base = $1,070
1069.7676359196739 1069.7676359196739
1069.7676359196739 5 4 1
NPV
3a-Scen11/21/18Worksheet 3a-Scenario Analysis11-6 Scenario
AnalysisThis worksheet extends the basic model (shown in Tab
1-Base-Case) to include scenario analysis. On this tab we
modify the Tab 1-Base-Case model in several ways (but note
that only the accelerated depreciation case is analyzed here).We
add worst-case and best-case scenarios, including the
probability that each scenario will occur, as shown below in
Figure 11-5. Management determined that some of the inputs
were not likely to stray far from the base-case levels, and the
NPV was not terribly sensitive to them anyway, so in our
analysis we change only 6 inputs: equipment cost, units sold in
Year 1, annual change in units sold after Year 1, sales price per
unit, variable cost per unit, nonvariable cost, and the tax rate.
Management gathered advice from experts in their marketing,
operations, logistics, HR, accounting, and finance departments
for the probability of each scenario and the values to use for the
worst-case and best-case scenarios.We show these base-case,
worst-case, and best-case value in the input columns for
scenarios in Figure 11-5 below, identified by the cells with
larger, non-black fonts. If you change any input for any
16. scenario, the key results shown immediately below the input
column will be updated because the inputs for each set of inputs
are linked to a model for that particular set of inputs; these 3
models are shown to the right of Figure 11-5. If you want to
return to the our original inputs for any model, you can go to
Scenario Manager (Data, What-If Analysis, Scenario Manager)
and pick the original scenario for the 3 cases.We chose to create
a separate scenario with its own set of changing cells for each
of the three cases because this allows a user to modify each
scenario separately and still easily see the results from the other
two scenarios. However, in worksheet "3b. Scen." we show how
to put all three scenarios into a single group (i.e., all three
scenarios have the same changing cells) and use Scenario
Manager's Summary feature.Figure 11-5 Analysis for Scenario
Shown Below:Analysis for Scenario Shown Below:Analysis for
Scenario Shown Below:Inputs and Key Results for Each
Scenario (Dollars in Thousands)Worst-CaseBase-CaseBest-
CaseScenarios:Scenario NameWorst-CaseBase-CaseBest-
CaseAnalysis for each scenario is shown to the right.Probability
of Scenario25%50%25%Intermediate
Calculations01234Intermediate Calculations01234Intermediate
Calculations01234Inputs:Unit sales8,50010,20010,2005,950Unit
sales10,00012,00012,0007,000Unit
sales11,50013,80013,8008,050Equipment
cost$11,000$10,000$9,000Sales price per
unit$1.80$1.85$1.91$1.97Sales price per
unit$2.00$2.08$2.16$2.25Sales price per
unit$2.20$2.31$2.43$2.55Salvage value of equip. in Year
4$1,000$1,000$1,000Variable cost per unit (excl.
depr.)$1.72$1.79$1.86$1.93Variable cost per unit (excl.
depr.)$1.56$1.61$1.66$1.70Variable cost per unit (excl.
depr.)$1.40$1.43$1.46$1.49Opportunity cost$0$0$0Nonvariable
costs (excl. depr.)$941$969$998$1,028Nonvariable costs (excl .
depr.)$1,107$1,140$1,174$1,210Nonvariable costs (excl.
depr.)$1,273$1,311$1,351$1,391Externalities
(cannibalization)$0$0$0Sales revenues = Units ×
17. Price/unit$15,300$18,911$19,478$11,703Sales revenues = Units
× Price/unit$20,000$24,960$25,958$15,748Sales revenues =
Units × Price/unit$25,300$31,878$33,472$20,502Units sold,
Year 1$8,500$10,000$11,500NOWCt =
15%(Revenuest+1)$1,530$1,891$1,948$1,170$0NOWCt =
15%(Revenuest+1)$2,000$2,496$2,596$1,575$0NOWCt =
15%(Revenuest+1)$2,530$3,188$3,347$2,050$0Units sold,
Year 2, Pct. change from Year 120%20%20%Basis for
depreciation$11,000Basis for depreciation$10,000Basis for
depreciation$9,000Units sold, Year 3, Pct. change from Year
220%20%20%Annual depreciation rate
(MACRS)33.33%44.45%14.81%7.41%Annual depreciation rate
(MACRS)33.33%44.45%14.81%7.41%Annual depreciation rate
(MACRS)33.33%44.45%14.81%7.41%Units sold, Year 4, Pct.
change from Year 3-30%-30%-30%Annual depreciation
expense$3,666$4,890$1,629$815Annual depreciation
expense$3,333$4,445$1,481$741Annual depreciation
expense$3,000$4,001$1,333$667Sales price per unit, Year
1$1.80$2.00$2.20Remaining undepreciated
value$7,334$2,444$815$0Remaining undepreciated
value$6,667$2,222$741$0Remaining undepreciated
value$6,000$2,000$667$0% Δ in sales price, after Year
13%4%5%Cash Flow ForecastCash Flows at End of YearCash
Flow ForecastCash Flows at End of YearCash Flow
ForecastCash Flows at End of YearVar. cost per unit (VC), Year
1$1.72$1.56$1.40012340123401234% Δ in VC, after Year
14%3%2%Sales revenues = Units ×
Price/unit$15,300$18,911$19,478$11,703Sales revenues = Units
× Price/unit$20,000$24,960$25,958$15,748Sales revenues =
Units × Price/unit$25,300$31,878$33,472$20,502Nonvar. cost
(Non-VC), Year 1$941$1,107$1,273Variable costs = Units ×
Cost/unit$14,620$18,246$18,976$11,512Variable costs = Units
× Cost/unit$15,600$19,282$19,860$11,933Variable costs =
Units × Cost/unit$16,100$19,706$20,101$11,960% Δ in Non-
VC, after Year 13%3%3%Nonvariable costs (excluding
depreciation)$941$969$998$1,028Nonvariable costs (excluding
18. depreciation)$1,107$1,140$1,174$1,210Nonvariable costs
(excluding depreciation)$1,273$1,311$1,351$1,391Project
WACC10%10%10%Depreciation$3,666$4,890$1,629$815Depre
ciation$3,333$4,445$1,481$741Depreciation$3,000$4,001$1,33
3$667Tax rate25%25%25%Earnings before interest and taxes
(EBIT)−$3,927−$5,194−$2,125−$1,652Earnings before interest
and taxes (EBIT)−$40$93$3,443$1,865Earnings before interest
and taxes (EBIT)$4,927$6,860$10,688$6,484NOWC as % of
next year's sales10%10%10%Taxes on operating profit (25%
rate)-$982−$1,298−$531−$413Taxes on operating profit (25%
rate)−$10$23$861$466Taxes on operating profit (25%
rate)$1,232$1,715$2,672$1,621Key Results:Net operating profit
after taxes−$2,945−$3,895−$1,594−$1,239Net operating profit
after taxes−$30$70$2,582$1,399Net operating profit after
taxes$3,695$5,145$8,016$4,863NPV −$9,795$1,070$15,073Add
back depreciation$3,666$4,890$1,629$815Add back
depreciation$3,333$4,445$1,481$741Add back
depreciation$3,000$4,001$1,333$667IRR−32.6%13.8%57.5%Eq
uipment purchases−$11,000Equipment
purchases−$10,000Equipment
purchases−$9,000MIRR−24.8%12.4%35.6%Salvage
value$1,000Salvage value$1,000Salvage
value$1,000Profitability index0.221.092.31Cash flow due to tax
on salvage value (25% rate)−$250Cash flow due to tax on
salvage value (25% rate)−$250Cash flow due to tax on salvage
value (25% rate)−$250PaybackNot found2.941.61Cash flow due
to change in WC−$1,530−$361−$57$778$1,170Cash flow due to
change in WC−$2,000−$496−$100$1,021$1,575Cash flow due
to change in WC−$2,530−$658−$159$1,297$2,050Discounted
paybackNot found3.651.81Opportunity cost, after
taxes$0$0$0$0$0Opportunity cost, after
taxes$0$0$0$0$0Opportunity cost, after taxes$0$0$0$0$0After -
tax cannibalization or complementary effect$0$0$0$0After-tax
cannibalization or complementary effect$0$0$0$0After-tax
cannibalization or complementary effect$0$0$0$0Project cash
flows: Time Line−$12,530$360$938$813$1,496Project cash
19. flows: Time Line−$12,000$2,807$4,415$5,084$4,464Project
cash flows: Time
Line−$11,530$6,037$8,986$10,646$8,330Project Evaluation
MeasuresProject Evaluation MeasuresProject Evaluation
MeasuresNPV -$9,795NPV $1,070NPV $15,073IRR-
32.64%IRR13.75%IRR57.53%MIRR-
24.82%MIRR12.37%MIRR35.57%Profitability
index0.22Profitability index1.09Profitability
index2.31PaybackERROR:#N/APayback2.94Payback1.61Discou
nted paybackERROR:#N/ADiscounted payback3.65Discounted
payback1.81Calculations for PaybackYear:01234Calculations
for PaybackYear:01234Calculations for PaybackYear:01234
Cumulative cash flows for payback-$12,530-$12,170-$11,233-
$10,420-$8,923 Cumulative cash flows for payback-$12,000-
$9,193-$4,778$306$4,771 Cumulative cash flows for payback-
$11,530-$5,493$3,493$14,139$22,469 Discounted cash flows
for disc. payback-$12,530$327$775$611$1,022 Discounted
cash flows for disc. payback-$12,000$2,552$3,649$3,820$3,049
Discounted cash flows for disc. payback-
$11,530$5,489$7,426$7,998$5,689 Cumulative discounted
cash flows-$12,530-$12,203-$11,428-$10,817-$9,795
Cumulative discounted cash flows-$12,000-$9,448-$5,799-
$1,980$1,070 Cumulative discounted cash flows-$11,530-
$6,041$1,385$9,383$15,073Scenario analysis extends risk
analysis in two ways: (1) It allows us to change more than one
variable at a time, hence to see the combined effects of changes
in several variables on NPV, and (2) It allows us to bring in the
probabilities of changes in the key variables.Figure 11-6 (shown
below) presents the cash flows for each scenario (the cash flows
are obtained from the 3 scenarios' analyses conducted above in
the blue, bright yellow, and green boxes). It also shows the
NPV for each scenario. Using the NPV and probability for each
scenario, we calculate the expected NPV, the standard
deviation, and the coefficient of variation. Later in the analysis
we consider the possibility of abandoning the project if the
worst case occurs, but our present analysis assumes that we
20. cannot abandon the project.Figure 11-6 Scenario Analysis:
Expected NPV and Its Risk (Dollars in Thousands)Predicted
Cash Flows for Alternative
ScenariosProb:01234WACCNPVBest
→25%−$11,530$6,037$8,986$10,646$8,33010.00%$15,073Base
→50%−$12,000$2,807$4,415$5,084$4,46410.00%$1,070Worst
→25%−$12,530$360$938$813$1,49610.00%−$9,795Expected
NPV =$1,854Standard Deviation (SD) =$8,827Coefficient of
Variation (CV) = Std. Dev./Expected NPV =4.76Scratch work
for chartWorst-Case−$9,79525%−$9,7950%Base-
Case$1,07050%$1,0700%Best-
Case$15,07325%$15,0730%Expected NPV$1,8540%$1,854-
15%Scenario Analysis: Expected Csh Flows and NPV of
Expected Cash FlowPredicted Cash Flows for Alternative
ScenariosProb:01234WACCNPVBest
→25%−$11,530$6,037$8,986$10,646$8,33010.00%Base→50%−
$12,000$2,807$4,415$5,084$4,46410.00%Worst
→25%−$12,530$360$938$813$1,49610.00%Expected
CF−$12,015$3,003$4,688$5,407$4,689NPV of Exp.
CF.$1,854Squared Deviations of Cash Flows from Expected
CF01234Best
→$235,225$325,888,243$441,043,786$513,516,201$413,914,59
9Base→$144,000,000$7,879,249$19,492,689$25,849,417$19,93
1,411Worst
→$157,000,900$129,416$878,906$660,883$2,239,002Sum of
Sq.
Dev.$301,236,125$333,896,909$461,415,381$540,026,500$436,
085,012
1
Probability Distribution of Scenarios:
Outcomes and Probabilities
Worst-Case
[Y VALUE]
[SERIES NAME]
[X VALUE]
21. -9795.3734464517456 -9795.3734464517456 0.25 0
Base-Case [Y VALUE]
1069.7676359196739 1069.7676359196739 0.5 0
Best-Case [Y VALUE]
15072.851034253141 15072.851034253141 0.25 0
Expected NPV
1854.2532149101858 1854.2532149101858 0 -0.15
NPV
1
1
3b-ScenMgr11/21/18Worksheet 3b-Scenario ManagerThe
previous worksheet used three different independent scenarios --
each of the scenarios had different changing cells. In this
worksheet, we explain how to have multiple scenarios with the
same changing cells. We also explain how to use Scenario
Manager's Summary feature.The section for Inputs and Key
results differs from that in the previous worksheet in several
ways. First, there is only 1 column for inputs and results. Each
of the three scenarios used in Scenario Manager in this sheet
specify values for the inputs below. In other words, all three
scenarios have the same changing cells. This is in contrast to
the previous worksheet in which each scenario had its own
separate changing cells. The values shown in the inputs section
are the values for the active scenario.Second, we have given
each cell for the inputs and key results a name. We do this so
that the Summary feature in the Scenario Manager will show
names instead of cell references. To name a cell, put your
cursor in the Name Box and give the cell a name. For example,
suppose we want to assign the name "Yellow" to the bright
yellow cell below. Following are instructions.ColorBefore
renaming cell: Our cursor is in cell A19, and the Name Box
22. shows A19.After renaming cell: When our cursor had selected
the yellow cell, we put our cursor in the Name Box and typed in
the name "Yellow". Notice that the Name Box in the screen shot
below now shows the cell's new name.To change the values in
the input section below, go to Data, What-If Analysis, Scenario
Manager, select a scenario, and click "Show." The model to the
right is linked to the inputs. The model calculates results, and
passes those results to the Key Results section below.Figure:
Not in Printed BookAnalysis for Scenario Shown Below:Inputs
and Key Results for Active Scenario (Dollars in
Thousands)Base-CaseScenario NameBase-CaseWorst-CaseBase-
CaseBest-CaseIntermediate Calculations01234Probability of
Scenario50%25%50%25%Unit
sales10,00012,00012,0007,000Inputs:Sales price per
unit$2.00$2.08$2.16$2.25Equipment
cost$10,000$11,000$10,000$9,000Variable cost per unit (excl.
depr.)$1.56$1.61$1.66$1.70Salvage value, equipment, Year
4$1,000$1,000$1,000$1,000Nonvariable costs (excl.
depr.)$1,107$1,140$1,174$1,210Opportunity
cost$0$0$0$0Sales revenues = Units ×
Price/unit$20,000$24,960$25,958$15,748Externalities
(cannibalization)$0$0$0$0NOWCt =
15%(Revenuest+1)$2,000$2,496$2,596$1,575$0Units sold,
Year 110,0008,50010,00011,500Basis for
depreciation$10,000Units sold, Year 2, Pct. change from Year
120%20%20%20%Annual depreciation rate
(MACRS)33.33%44.45%14.81%7.41%Units sold, Year 3, Pct.
change from Year 220%20%20%20%Annual depreciation
expense$3,333$4,445$1,481$741Units sold, Year 4, Pct. change
from Year 3-30%-30%-30%-30%Remaining undepreciated
value$6,667$2,222$741$0Sales price per unit, Year
1$2.0000$1.8000$2.0000$2.2000Cash Flow ForecastCash Flows
at End of YearAnnual change in sales price, after Year
14%3%4%5%01234Variable cost per unit (VC), Year
1$1.5600$1.7200$1.5600$1.4000Sales revenues = Units ×
Price/unit$20,000$24,960$25,958$15,748Annual change in VC,
23. after Year 13%4%3%2%Variable costs = Units ×
Cost/unit$15,600$19,282$19,860$11,933Nonvariable cost (Non-
VC), Year 1$1,107.00$941.00$1,107.00$1,273.00Nonvariable
costs (excluding depreciation)$1,107$1,140$1,174$1,210Annual
change in Non-VC, after Year
13%3%3%3%Depreciation$3,333$4,445$1,481$741Project
WACC10%10%10%10%Earnings before interest and taxes
(EBIT)−$40$93$3,443$1,865Tax
rate25.0%25.0%25.0%25.0%Taxes on operating profit (25%
rate)−$10$23$861$466Working capital as % of next year's
sales10%10%10%10%Net operating profit after
taxes−$30$70$2,582$1,399Add back
depreciation$3,333$4,445$1,481$741Key Results:NPV
$1,070−$9,795$1,070$15,073Equipment
purchases−$10,000IRR13.75%−32.64%13.75%57.53%Salvage
value$1,000MIRR12.37%−24.82%12.37%35.57%Cash flow due
to tax on salvage value (25% rate)−$250Profitabilit y
index1.090.221.092.31Cash flow due to change in
WC−$2,000−$496−$100$1,021$1,575Payback2.94Not
found2.941.61Opportunity cost, after
taxes$0$0$0$0$0Discounted payback3.65Not
found3.651.81After-tax cannibalization or complementary
effect$0$0$0$0Project cash flows: Time
Line−$12,000$2,807$4,415$5,084$4,464Project Evaluation
MeasuresTo create a summary sheet showing all scenarios, go to
Data, What-If Analysis, Scenario Manager, and click on
Summary, and select the cells with the key results. The
Summary will be shown in a new worksheet. For convenience,
we have copied that worksheet and show it below. If you make
changes to any scenarios, you must run the Summary again--it
does NOT automatcially update.NPV
$1,070IRR13.75%MIRR12.37%Profitability
index1.09Payback2.94Discounted payback3.65Calculations for
PaybackYear:01234 Cumulative cash flows for payback-
$12,000-$9,193-$4,778$306$4,771 Discounted cash flows for
disc. payback-$12,000$2,552$3,649$3,820$3,049 Cumulative
24. discounted cash flows-$12,000-$9,448-$5,799-$1,980$1,070We
copied the Scenario Summary from the worksheet where it was
created and moved it here. It will not update
automatically.Scenario SummaryCurrent Values:Worst-
CaseBase-CaseBest-CaseChanging Cells:ScenarioBase-
CaseWorst-CaseBase-CaseBest-
CaseProbability50%25%50%25%$E$72Equipment$10,000$11,0
00$10,000$9,000Salvage$1,000$1,000$1,000$1,000OppCost$0$
0$0$0Externalities$0$0$0$0Units_Sold10,0008,50010,00011,50
0Yr1_unit_g20%20%20%20%Yr2_unit_g20%20%20%20%Yr4_
unit_g-30%-30%-30%-
30%Sales_Price$2.0000$1.8000$2.0000$2.2000Growth_in_Sale
s_Price_per_Unit4%3%4%5%Variable_cost_per_unit$1.5600$1.
7200$1.5600$1.4000Growth_in_VC_per_Unit3%4%3%2%Nonv
ariable_Costs$1,107.00$941.00$1,107.00$1,273.00Growth_in_
Nonvariable_costs3%3%3%3%WACC10%10%10%10%Tax_Rat
e25.0%25.0%25.0%25.0%NOWC_as_percent_of_next_year_sa1
0%10%10%10%Result
Cells:NPV$1,070−$9,795$1,070$15,073IRR13.75%−32.64%13.
75%57.53%MIRR12.37%−24.82%12.37%35.57%Profitability_I
ndex1.090.221.092.31Payback2.94Not
found2.941.61Discounted_Payback3.65Not found3.651.81No tes:
Current Values column represents values of changing cells
attime Scenario Summary Report was created. Changing cells
for eachscenario are highlighted in gray.
4a-Sim10011/21/18Worksheet 4-Simulation with 100
TrialsSimulation control, check boxes, and formsNote: this
section is relatively technical and some instructors may choose
to skip it with no loss in continuity.You might wonder "what's
the deal about this check box and why does it work this way?"
There are 2 parts to this question: Why it is useful for the
simulation and how do you use a check box for it? Let's answer
the "why it is useful for a simulation" question first, then talk
about check boxes. This check box is linked to cell B17. If you
click on the box, B17 returns a "TRUE" value, and if the box is
unchecked then it returns a "FALSE" value. The reason you
25. can't see anything in B17 is because we made the font color the
same as the background color so it wouldn't be distracting.
Below, here's what is in cell B17:To put random variables in the
Data Table for the simulation, the box shown below must be
checked; otherwise, the Data Table contains only zeroes and
doesn't update when the sheet makes a calculation (other than
the first time you check this box or if you insert or delete rows
or columns). If the box is unchecked and you check it, the check
mark won't show up until the Table is updated, so don't get
impatient and click it twice. After you have checked the box,
the Data Table will update any time you change a cell in the
worksheet. So to make the Data Table update, make sure the
box is checked and then hit the F9 key.FALSESee, B17 reads
either True or False, depending on whether the box is checked
or not. The formulas in the simulation data table in cells B200
to I200 use this value to determine whether or not the data table
should be evaluated. For example, the formula in B200 is
=IF($B$17,F54,0). If B17 is TRUE, then the cell returns the
value in F54, which is the simulated equipment cost. If B17 is
FALSE, then it returns 0. The other formulas in that row are
similar. The end result is that if B17 is FALSE, then the data
table has no formulas to evaluate (everything is zero) and if it is
TRUE, then it has formulas to evaluate and it records the
simulation results. You didn't really need a check box; you
could just as well have left B17 visible and either put a 1 or a 0
in it, and had the IF statements in row 200 check, instead, for
whether B17 is equal to 1. But the check box is neat.Put a check
in the box below to run simulation; otherwise, the simulation
data table will have only zeros.Uncheck the box when you
finish!!FALSERemember to uncheck the box above when you
are through with the simulation, or the Data Table will
recalculate any time you make a change in the worksheet, which
will slow down all other calculations in the worksheet. Now for
how to use Forms in Excel. To insert a check box in Excel 2010
you must first enable the Developer tab on your Ribbon. These
are instructions for Excel 2010 For later versions of Excel you
26. can find instructions for this by searching on "check box" in
Excel help. Click the File tab, then click Options, then click
Customize Ribbon. Under Customize the Ribbon and under
Main Tabs, select the Developer check box.
Monte Carlo simulation is similar to scenario analysis in that
different values of key inputs are used. Unlike scenario
analysis, Monte Carlo simulation draws a trial set of input
values from specified probability distributions and then
computes the NPV for this trial. This process is repeated for
hundreds, or even thousands, of trials, with key results (like
NPV) saved from each trial. After running the number of
desired trials, the NPVs from the trials can be averaged to
estimate the project's expected NPV; the trial results can also be
used to provide a histogram showing the project's possible
outcomes.On the Developer tab, in the Controls group, click on
Insert and then, in the Form Controls section, click on Insert
(the picture that like a tool box). Look at the Forms Control
section and click on the icon that looks like a check mark. Move
your cursor to where you'd like the check box to go, and click
there. A name, like Check Box 25, will show up next to the box.
Right click on the check box and click on Format Control. Then
under the Control tab, make sure the "unchecked" button is
pressed, then put in a cell reference in the Cell link box. We had
$B$17 in that box. Suppose you put in $B$19 for your box. You
are mostly done! Now when you click on the check box, cell
B19 will display TRUE and when it is not checked, B19will
display FALSE. You can use these two logical values in your
Excel programming. All that is left is to put in a useful
description for the check box. You don't want your users to be
confused about what the box is for. Just click on the check box
area and edit the name to be something like "Click this box if
you want something special to happen to the spreadsheet" (like
enable the data table to do its calculations!).Panel A, shown in
the blue-bordered box below and slightly to the right, shows the
inputs from the previous scenario analysis. It also shows the
expected value and standard deviation for those inputs based on
27. the probability of each scenario. To compare apples and apples,
we will assume that the inputs for the simulation analysis are
drawn from a normal distribution with the same expected value
and standard deviation as the inputs from the scenario analysis
(these are shown in the figure below in the blue section in
Columns C and D. However, any of the input values in
Columns C and D may be changed by the user if desired. In
addition to the inputs for all the variables used previously, the
inputs section also has an input value for the assumed
correlation between units sold in Year 1 and changes in units
sold in later years.The figure below shows the trial inputs and
key results. The inputs used further below in the model are
shown in dark red and are drawn from a normal distribution
with the mean and standard deviation specified in Columns C
and D. We do this in a 2-step process. Column E shows a
standard normal random variable created with Excel's random
number generator. Column F transforms the standard normal
random variable into a normal random variable with the desired
mean and standard deviation. To see updated values, hit the F9
key.Figure 11-7 (But showing results of current simulation
iteration.) Panel A: Values from Scenario Analysis and Their
Expected Values and Standard DeviationsInputs and Key
Results for the Current Simulation Trial (Dollars in
Thousands)To change an input, change one of the blue values in
Columns C or D. To see an updated set of trial values, hit the
F9 key. Inputs and key results will update for the current
trial.Inputs from Scenario Analysis for Comparison to
SimulationValues for Column E used for Figure 7 in printed
book. See this cell's Comment.
Mike Ehrhardt: To "replicate" Figure 7 in the printed book, you
would need to copy these values into Column E, replacing the
random variables. If you do so, be sure to "undo" your change
so that the formulas for the random variables in Column E will
be restored.Inputs for Simulation Probability
DistributionsRandom Variables Used in Current Simulation
28. TrialWorst-CaseBase-CaseBest-CaseExpected Value of
InputStandard Deviation of InputExpected Value of
InputStandard Deviation of InputStandard Normal Random
Variable
Mike Ehrhardt: The RAND() function generates a random
number between 0 and 1. When this value is the argument in the
NORM.S.INV function, the NORM.S.INV interprets the value
as the cumulative probability of a standard normal distribution.
Then the NORM.S.INV function finds a standard normal
variable Z such that its the probability of drawing a value of Z
or less is equal to the argument. This means the formula
=NORM.S.INV(RAND()) returns a random standard normal
variable. Value Used in Current TrialProbability of
Scenario25%50%25%Equipment
cost$10,000$7070.698$10,493$11,000$10,000$9,000$10,000$7
07Salvage value of equip. in Year 4——
$1,000$1,000$1,000$1,000Opportunity cost——
$0$0$0$0Externalities (cannibalization)——$0$0$0$0Units
sold, Year
110,0001,0610.82010,8708,50010,00011,50010,0001,061Units
sold, Year 2——13,04420%20%20%Units sold, Year 3——
13,04420%20%20%Units sold, Year 4——7,609-30%-30%-
30%Sales price per unit, Year
1$2.00$0.14−1.505$1.79$1.80$2.00$2.20$2.00$0.14% Δ in
sales price, after Year 14.00%0.71%1.564
Michael Ehrhardt: We must use a slightly different formula to
get a standard normal for the percentage change in sale price
after Year 1. If demand is high for Year 1 units, then the
percentage change in prices after Year 1 can be higher due to
the stronger than expected demand. The reverse is true if unit
sales in Year 1 are owr than expected. In other words, the
percentage cahnge in prices after Year 1 is positively correlate d
with the unit sales in Year 1. We incorporate this into the
model by forming a variable that is a weighted combination of
29. the standard normal variable for units in the 1st year and an
uncorrelated standard normal, with the "weights" in the
combination depending on the desired
correlation.5.11%3.00%4.00%5.00%4.00%0.71%Var. cost per
unit (VC), Year
1$1.56$0.11−0.883$1.46$1.72$1.56$1.40$1.56$0.11% Δ in VC,
after Year
13.00%0.71%54.77%3.39%4.00%3.00%2.00%3.00%0.71%Nonv
ar. cost (Non-VC), Year
1$1,107$1170.554$1,171.97$941$1,107$1,273$1,107$117% Δ
in Non-VC, after Year 1——3%3.00%3.00%3.00%Project
WACC10.00%10.00%10.00%10.00%Tax rate——
25.00%25.00%25.00%25.00%NOWC as % of next year's sales—
—15.00%10.00%10.00%10.00%Assumed correlation between
units sold in Year 1 and annual change in units sold in later
years:r =0.60Key ResultsKey Results Based on Current
TrialWorst-CaseBase-CaseBest-
CaseNPV−$1,475−$9,795$1,070$15,073NPVIRR5.46%−32.64%
13.75%57.53%IRRMIRR6.84%−24.82%12.37%35.57%MIRRPI0
.890.221.092.31PIPayback3.57Not
found2.941.61PaybackDiscounted paybackNot foundNot
found$3.65$1.81Discounted payback Panel B: Project Analysis
for Current Trial in Simulation Using Inputs from Figure 11-7
Column FIntermediate Calculations01234Unit
sales10,87013,04413,0447,609Sales price per
unit$1.79$1.88$1.97$2.08Variable cost per unit (excl.
depr.)$1.46$1.51$1.56$1.61Nonvariable costs (excl.
depr.)$1,172$1,207$1,243$1,281Sales revenues = Units ×
Price/unit$19,427$24,503$25,754$15,790NOWCt =
15%(Revenuest+1)$2,914$3,675$3,863$2,369$0Basis for
depreciation$10,493Annual depreciation rate
(MACRS)33.33%44.45%14.81%7.41%Annual depreciation
expense$3,497$4,664$1,554$778Remaining undepreciated
value$6,996$2,332$778$0Cash Flow ForecastCash Flows at End
of Year01234Sales revenues = Units ×
Price/unit$19,427$24,503$25,754$15,790Variable costs =
30. Units × Cost/unit$15,871$19,691$20,358$12,278Nonvariable
costs (excluding
depreciation)$1,172$1,207$1,243$1,281Depreciation$3,497$4,6
64$1,554$778Earnings before interest and taxes
(EBIT)−$1,114−$1,059$2,599$1,455Taxes on operating profit
(25% rate)−$278−$265$650$364Net operating profit after
taxes−$835−$794$1,949$1,091Add back
depreciation$3,497$4,664$1,554$778Equipment
purchases−$10,493Salvage value$1,000Cash flow due to tax on
salvage value (25% rate)−$250Cash flow due to change in
WC−$2,914−$761−$188$1,495$2,369Opportunity cost, after
taxes$0$0$0$0$0After-tax cannibalization or complementary
effect$0$0$0$0Project cash flows: Time
Line−$13,407$1,901$3,682$4,998$4,987Project Evaluation
MeasuresNPV -$1,475IRR5.46%MIRR6.84%Profitability
index0.89Payback3.57Discounted
paybackERROR:#N/ACalculations for PaybackYear:01234
Cumulative cash flows for payback-$13,407-$11,506-$7,824-
$2,826$2,160 Discounted cash flows for disc. payback-
$13,407$1,901$3,043$3,755$3,406 Cumulative discounted
cash flows-$13,407-$11,506-$8,463-$4,708-$1,302How the
Simulation WorksWe use a Data Table to perform the
simulation (the Data Table is below shaded in lavender). When
the Data Table is updated, it will insert new random variables
for each of the inputs we allow to change in Figure 11-7 above,
run the analysis in Panel B above, and then save the NPV for
each trial. (We also save the input variables for each trial so
that we can verify that they are behaving as we expect.) We set
the first column of the Data Table (the variable to be changed in
each row) to numbers from 1-100. We don't really use these
numbers anywhere in the analysis, but if we tell the Data Table
to treat these as the Column inputs, Excel will recalculate all
items in the Data Table, including the random inputs and the
resulting NPV. In other words, we "trick" Excel into doing a
simulation. We tell Excel to insert each of the Column inputs in
the Data Table into the cell immediately below this box. This
31. cell isn't linked to anything else, but each time Excel updates a
row of the Data Table, all the random values will be
updated.Column input cell to "trick" Excel into updating
random variables in Data Table:1
Mike Ehrhardt: Do not delete or change this cell or row .Don't
change the red cell.Excel normally updates all values in a Data
Table each time any cell that is related to the Data Table
changes. In our case, we have random variables in the Data
Table, so each time any cell in the worksheet makes a
calculation, the Data Table is updated. If the Data Table has
many rows, updating it can take up to 20 or 30 seconds. This is
ok when we want to update the Table, but it is annoying to wait
30 seconds any time we make any changes in the worksheet.
The "check box" explained at the top of the sheet helps with
this annoyance.You don't need to change anything in this
section. It will be updated automatically if you do a simulation.
The summary of the simulation results and the histogram are
based on the simulation trials in the Data Table below and are
updated automatically when you do a simulation. Note: If
results are all zeros, go back to row 17 and "check" the box by
clicking it with your cursor.Figure 11-8 (But is current
simulation and is based only on 100 iterations.)Summary of
Simulation Results (Thousands of Dollars)Number of
Trials:0Input VariablesSummary Statistics for
Simulated Input VariablesEquipment costUnits sold, Year
1Sales price per unit, Year 1% Δ in sales price, after Year 1Var.
cost per unit (VC), Year 1% Δ in VC, after Year 1Nonvar. cost
(Non-VC), Year
1Average$00$0.000.00%$0.000.00%$0.00Standard
deviation$00$0.000.00%$0.000.00%$0.00Maximum$00$0.000.0
0%$0.000.00%$0.00Minimum$00$0.000.00%$0.000.00%$0.00C
orrelation with unit salesERROR:#DIV/0!Scratch work for
chart: see comments.Summary Statistics for Simulated
ResultsCount
32. Mike Ehrhardt: This column counts the umber of simulation
trials with NPVs greater than the bottom of range and less than
top the top of the range.NPVRange bottom
Mike Ehrhardt: This column of data contains the ranges into
which the NPV's are grouped. The numbers shown are the
bottoms of each range. The ranges are automatically selected so
that the ranges will fit the data for the particular
simulation.100Percent
Mike Ehrhardt: This column shows the percent of trials with
NPVs in the range.
Michael Ehrhardt: We must use a slightly different formula to
get a standard normal for the percentage change in sale price
after Year 1. If demand is high for Year 1 units, then the
percentage change in prices after Year 1 can be higher due to
the stronger than expected demand. The reverse is true if unit
sales in Year 1 are owr than expected. In other words, the
percentage cahnge in prices after Year 1 is positively correlated
with the unit sales in Year 1. We incorporate this into the
model by forming a variable that is a weighted combination of
the standard normal variable for units in the 1st year and an
uncorrelated standard normal, with the "weights" in the
combination depending on the desired correlation.
Mike Ehrhardt: To "replicate" Figure 7 in the printed book, you
would need to copy these values into Column E, replacing the
random variables. If you do so, be sure to "undo" your change
so that the formulas for the random variables in Column E will
be restored.
Mike Ehrhardt: The RAND() function generates a random
number between 0 and 1. When this value is the argument in the
NORM.S.INV function, the NORM.S.INV interprets the value
as the cumulative probability of a standard normal distribution.
33. Then the NORM.S.INV function finds a standard normal
variable Z such that its the probability of drawing a value of Z
or less is equal to the argument. This means the formula
=NORM.S.INV(RAND()) returns a random standard normal
variable.
Mike Ehrhardt: This column counts the umber of simulation
trials with NPVs greater than the bottom of range and less than
top the top of the range.
Mike Ehrhardt: This column of data contains the ranges into
which the NPV's are grouped. The numbers shown are the
bottoms of each range. The ranges are automatically selected so
that the ranges will fit the data for the particular simulation.
Mike Ehrhardt: Do not delete or change this cell or
row.Average$0$00ERROR:#DIV/0!Standard
deviation$0$00ERROR:#DIV/0!Maximum$0$00ERROR:#DIV/0
!Minimum$0$00ERROR:#DIV/0!Median$0$00ERROR:#DIV/0!
Probability of NPV > 00.0%$00ERROR:#DIV/0!Coefficient of
variationERROR:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV
/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!
$00ERROR:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!$0
0ERROR:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!$00E
RROR:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!$00ER
ROR:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!$00ERR
OR:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!$00ERRO
R:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!Sum-
0ERROR:#DIV/0!Output of Simulation in Data TableTrial
NumberEquipment costUnits sold, Year 1Sales price per unit,
Year 1% Δ in sales price, after Year 1Var. cost per unit (VC),
Year 1% Δ in VC, after Year 1Nonvar. cost (Non-VC), Year
1NPV000000001000000002000000003000000004000000005000
00000600000000700000000800000000900000000100000000011
00000000120000000013000000001400000000150000000016000
00000170000000018000000001900000000200000000021000000
35. unchecked then it returns a "FALSE" value. The reason you
can't see anything in B17 is because we made the font color the
same as the background color so it wouldn't be distracting.
Below, here's what is in cell B17:To put random variables in the
Data Table for the simulation, the box shown below must be
checked; otherwise, the Data Table contains only zeroes and
doesn't update when the sheet makes a calculation (other than
the first time you check this box or if you insert or delete rows
or columns). If the box is unchecked and you check it, the check
mark won't show up until the Table is updated, so don't get
impatient and click it twice. After you have checked the box,
the Data Table will update any time you change a cell in the
worksheet. So to make the Data Table update, make sure the
box is checked and then hit the F9 key.FALSESee, B17 reads
either True or False, depending on whether the box is checked
or not. The formulas in the simulation data table in cells B200
to I200 use this value to determine whether or not the data table
should be evaluated. For example, the formula in B200 is
=IF($B$17,F54,0). If B17 is TRUE, then the cell returns the
value in F54, which is the simulated equipment cost. If B17 is
FALSE, then it returns 0. The other formulas in that row are
similar. The end result is that if B17 is FALSE, then the data
table has no formulas to evaluate (everything is zero) and if it is
TRUE, then it has formulas to evaluate and it records the
simulation results. You didn't really need a check box; you
could just as well have left B17 visible and either put a 1 or a 0
in it, and had the IF statements in row 200 check, instead, for
whether B17 is equal to 1. But the check box is neat.Put a check
in the box below to run simulation; otherwise, the simulation
data table will have only zeros.Uncheck the box when you
finish!!FALSERemember to uncheck the box above when you
are through with the simulation, or the Data Table will
recalculate any time you make a change in the worksheet, which
will slow down all other calculations in the worksheet. Now for
how to use Forms in Excel. To insert a check box in Excel 2010
you must first enable the Developer tab on your Ribbon. These
36. are instructions for Excel 2010 For later versions of Excel you
can find instructions for this by searching on "check box" in
Excel help. Click the File tab, then click Options, then click
Customize Ribbon. Under Customize the Ribbon and under
Main Tabs, select the Developer check box.
Monte Carlo simulation is similar to scenario analysis in that
different values of key inputs are used. Unlike scenario
analysis, Monte Carlo simulation draws a trial set of input
values from specified probability distributions and then
computes the NPV for this trial. This process is repeated for
hundreds, or even thousands, of trials, with key results (like
NPV) saved from each trial. After running the number of
desired trials, the NPVs from the trials can be averaged to
estimate the project's expected NPV; the trial results can also be
used to provide a histogram showing the project's possible
outcomes.On the Developer tab, in the Controls group, click on
Insert and then, in the Form Controls section, click on Insert
(the picture that like a tool box). Look at the Forms Control
section and click on the icon that looks like a check mark. Move
your cursor to where you'd like the check box to go, and click
there. A name, like Check Box 25, will show up next to the box.
Right click on the check box and click on Format Control. Then
under the Control tab, make sure the "unchecked" button is
pressed, then put in a cell reference in the Cell link box. We had
$B$17 in that box. Suppose you put in $B$19 for your box. You
are mostly done! Now when you click on the check box, cell
B19 will display TRUE and when it is not checked, B19will
display FALSE. You can use these two logical values in your
Excel programming. All that is left is to put in a useful
description for the check box. You don't want your users to be
confused about what the box is for. Just click on the check box
area and edit the name to be something like "Click this box if
you want something special to happen to the spreadsheet" (like
enable the data table to do its calculations!).Panel A, shown in
the blue-bordered box below and slightly to the right, shows the
inputs from the previous scenario analysis. It also shows the
37. expected value and standard deviation for those inputs based on
the probability of each scenario. To compare apples and apples,
we will assume that the inputs for the simulation analysis are
drawn from a normal distribution with the same expected value
and standard deviation as the inputs from the scenario analysis
(these are shown in the figure below in the blue section in
Columns C and D. However, any of the input values in
Columns C and D may be changed by the user if desired. In
addition to the inputs for all the variables used previously, the
inputs section also has an input value for the assumed
correlation between units sold in Year 1 and changes in units
sold in later years.The figure below shows the trial inputs and
key results. The inputs used further below in the model are
shown in dark red and are drawn from a normal distribution
with the mean and standard deviation specified in Columns C
and D. We do this in a 2-step process. Column E shows a
standard normal random variable created with Excel's random
number generator. Column F transforms the standard normal
random variable into a normal random variable with the desired
mean and standard deviation. To see updated values, hit the F9
key.Figure 11-7 (But showing results of current simulation
iteration.) Panel A: Values from Scenario Analysis and Their
Expected Values and Standard DeviationsInputs and Key
Results for the Current Simulation Trial (Dollars in
Thousands)To change an input, change one of the blue values in
Columns C or D. To see an updated set of trial values, hit the
F9 key. Inputs and key results will update for the current
trial.Inputs from Scenario Analysis for Comparison to
SimulationValues for Column E used for Figure 7 in printed
book. See this cell's Comment.
Mike Ehrhardt: To "replicate" Figure 7 in the printed book, you
would need to copy these values into Column E, replacing the
random variables. If you do so, be sure to "undo" your change
so that the formulas for the random variables in Column E will
be restored.Values used in textbook.Inputs for Simulation
38. Probability DistributionsRandom Variables Used in Current
Simulation TrialInputs for Simulation Probability
DistributionsRandom Variables Used in Current Simulation
TrialWorst-CaseBase-CaseBest-CaseExpected Value of
InputStandard Deviation of InputExpected Value of
InputStandard Deviation of InputStandard Normal Random
Variable
Mike Ehrhardt: The RAND() function generates a random
number between 0 and 1. When this value is the argument in the
NORM.S.INV function, the NORM.S.INV interprets the value
as the cumulative probability of a standard normal distribution.
Then the NORM.S.INV function finds a standard normal
variable Z such that its the probability of drawing a value of Z
or less is equal to the argument. This means the formula
=NORM.S.INV(RAND()) returns a random standard normal
variable. Value Used in Current TrialProbability of
ScenarioExpected Value of InputStandard Deviation of
InputStandard Normal Random VariableValue Used in Current
Trial25%50%25%Equipment
cost$10,000$707−0.591$9,582$11,000$10,000$9,000$10,000$7
07Equipment cost$10,000$707−1.034$9,269Salvage value of
equip. in Year 4——$1,000$1,000$1,000$1,000Salvage value of
equip. in Year 4——$1,000Opportunity cost——
$0$0$0$0Opportunity cost——$0Externalities
(cannibalization)——$0$0$0$0Externalities (cannibalization)—
—$0Units sold, Year
110,0001,061−1.5948,3098,50010,00011,50010,0001,061Units
sold, Year 110,0001,0611.37811,461Units sold, Year 2——
9,97120%20%20%Units sold, Year 2——13,754Units sold, Year
3——9,97120%20%20%Units sold, Year 3——13,754Units
sold, Year 4——5,816-30%-30%-30%Units sold, Year 4——
8,023Sales price per unit, Year
1$2.00$0.140.965$2.14$1.80$2.00$2.20$2.00$0.14Sales price
per unit, Year 1$2.00$0.140.065$2.01% Δ in sales price, after
Year 14.00%0.71%−1.549
39. Michael Ehrhardt: We must use a slightly different formula to
get a standard normal for the percentage change in sale price
after Year 1. If demand is high for Year 1 units, then the
percentage change in prices after Year 1 can be higher due to
the stronger than expected demand. The reverse is true if unit
sales in Year 1 are owr than expected. In other words, the
percentage cahnge in prices after Year 1 is positively correlated
with the unit sales in Year 1. We incorporate this into the
model by forming a variable that is a weighted combination of
the standard normal variable for units in the 1st year and an
uncorrelated standard normal, with the "weights" in the
combination depending on the desired
correlation.2.90%3.00%4.00%5.00%4.00%0.71%% Δ in sales
price, after Year 14.00%0.71%0.9034.64%Var. cost per unit
(VC), Year
1$1.56$0.11−1.753$1.36$1.72$1.56$1.40$1.56$0.11Var. cost
per unit (VC), Year 1$1.56$0.110.220$1.58% Δ in VC, after
Year 13.00%0.71%-
8.90%2.94%4.00%3.00%2.00%3.00%0.71%% Δ in VC, after
Year 13.00%0.71%69.95%3.49%Nonvar. cost (Non-VC), Year
1$1,107$1170.481$1,163.47$941$1,107$1,273$1,107$117Nonv
ar. cost (Non-VC), Year 1$1,107$1170.879$1,210.16% Δ in
Non-VC, after Year 1——3%3.00%3.00%3.00%% Δ in Non-VC,
after Year 1——3%Project WACC——
10.00%10.00%10.00%10.00%Project WACC——10.00%Tax
rate——25.00%25.00%25.00%25.00%Tax rate——
25.00%NOWC as % of next year's sales——
15.00%10.00%10.00%10.00%NOWC as % of next year's sales—
—15.00%Assumed correlation between units sold in Year 1 and
annual change in units sold in later years:Assumed correlation
between units sold in Year 1 and annual change in units sold in
later years:r =0.60Key Resultsr =0.60Key Results Based on
Current TrialWorst-CaseBase-CaseBest-CaseKey Results Based
on Current
TrialNPV$5,565−$9,795$1,070$15,073NPVNPV$2,358IRR28.3
40. 2%−32.64%13.75%57.53%IRRIRR17.25%MIRR20.80%−24.82
%12.37%35.57%MIRRMIRR14.78%PI1.450.221.092.31PIPI1.1
9Payback2.30Not
found2.941.61PaybackPayback2.86Discounted payback$2.60Not
found$3.65$1.81Discounted paybackDiscounted payback$3.36
Panel B: Project Analysis for Current Trial in Simulation Using
Inputs from Figure 11-7 Column FIntermediate
Calculations01234Unit sales8,3099,9719,9715,816Sales price
per unit$2.14$2.20$2.26$2.33Variable cost per unit (excl.
depr.)$1.36$1.40$1.44$1.49Nonvariable costs (excl.
depr.)$1,163$1,198$1,234$1,271Sales revenues = Units ×
Price/unit$17,752$21,921$22,558$13,541NOWCt =
15%(Revenuest+1)$2,663$3,288$3,384$2,031$0Basis for
depreciation$9,582Annual depreciation rate
(MACRS)33.33%44.45%14.81%7.41%Annual depreciation
expense$3,194$4,259$1,419$710Remaining undepreciated
value$6,388$2,129$710$0Cash Flow ForecastCash Flows at End
of Year01234Sales revenues = Units ×
Price/unit$17,752$21,921$22,558$13,541Variable costs =
Units × Cost/unit$11,314$13,976$14,386$8,638Nonvariable
costs (excluding
depreciation)$1,163$1,198$1,234$1,271Depreciation$3,194$4,2
59$1,419$710Earnings before interest and taxes
(EBIT)$2,081$2,488$5,518$2,921Taxes on operating profit
(25% rate)$520$622$1,380$730Net operating profit after
taxes$1,561$1,866$4,139$2,191Add back
depreciation$3,194$4,259$1,419$710Equipment
purchases−$9,582Salvage value$1,000Cash flow due to tax on
salvage value (25% rate)−$250Cash flow due to change in
WC−$2,663−$625−$96$1,353$2,031Opportunity cost, after
taxes$0$0$0$0$0After-tax cannibalization or complementary
effect$0$0$0$0Project cash flows: Time
Line−$12,245$4,129$6,030$6,910$5,682Project Evaluation
MeasuresNPV $5,565IRR28.32%MIRR20.80%Profitability
index1.45Payback2.30Discounted payback2.60Calculations for
PaybackYear:01234 Cumulative cash flows for payback-
41. $12,245-$8,116-$2,086$4,824$10,506 Discounted cash flows
for disc. payback-$12,245$4,129$4,983$5,192$3,881
Cumulative discounted cash flows-$12,245-$8,116-
$3,133$2,059$5,940How the Simulation WorksWe use a Data
Table to perform the simulation (the Data Table is below shaded
in lavender). When the Data Table is updated, it will insert new
random variables for each of the inputs we allow to change in
Figure 11-7 above, run the analysis in Panel B above, and then
save the NPV for each trial. (We also save the input variables
for each trial so that we can verify that they are behaving as we
expect.) We set the first column of the Data Table (the variable
to be changed in each row) to numbers from 1-100. We don't
really use these numbers anywhere in the analysis, but if we tell
the Data Table to treat these as the Column inputs, Excel will
recalculate all items in the Data Table, including the random
inputs and the resulting NPV. In other words, we "trick" Excel
into doing a simulation. We tell Excel to insert each of the
Column inputs in the Data Table into the cell immediately
below this box. This cell isn't linked to anything else, but each
time Excel updates a row of the Data Table, all the random
values will be updated.Column input cell to "trick" Excel into
updating random variables in Data Table:1
Mike Ehrhardt: Do not delete or change this cell or row.Don't
change the red cell.Excel normally updates all values in a Data
Table each time any cell that is related to the Data Table
changes. In our case, we have random variables in the Data
Table, so each time any cell in the worksheet makes a
calculation, the Data Table is updated. If the Data Table has
many rows, updating it can take up to 20 or 30 seconds. This is
ok when we want to update the Table, but it is annoying to wait
30 seconds any time we make any changes in the worksheet.
The "check box" explained at the top of the sheet helps with
this annoyance.You don't need to change anything in this
section. It will be updated automatically if you do a simulation.
The summary of the simulation results and the histogram are
42. based on the simulation trials in the Data Table below and are
updated automatically when you do a simulation. Note: If
results are all zeros, go back to row 17 and "check" the box by
clicking it with your cursor.Figure 11-8 (But is current
simulation and is based only on 100 iterations.)Summary of
Simulation Results (Thousands of Dollars)Number of
Trials:0Input VariablesSummary Statistics for
Simulated Input VariablesEquip-ment costUnits sold, Year
1Sales price per unit,
Year 1% Δ in sales price, after
Year 1Var. cost per unit (VC),
Year 1% Δ in VC, after Year 1Nonvar. cost (Non-VC),
Year 1Average$00$0.000.0%$0.000.0%$0Standard
deviation$00$0.000.0%$0.000.0%$0Maximum$00$0.000.0%$0.
000.0%$0Minimum$00$0.000.0%$0.000.0%$0Correlation with
unit salesERROR:#DIV/0!Scratch work for chart: see
comments.Summary Statistics for Simulated ResultsCount
Mike Ehrhardt: This column counts the umber of simulation
trials with NPVs greater than the bottom of range and less than
top the top of the range.NPVRange bottom
Mike Ehrhardt: This column of data contains the ranges into
which the NPV's are grouped. The numbers shown are the
bottoms of each range. The ranges are automatically selected so
that the ranges will fit the data for the particular
simulation.10000Percent
Mike Ehrhardt: This column shows the percent of trials with
NPVs in the range.
Michael Ehrhardt: We must use a slightly different formula to
get a standard normal for the percentage change in sale price
after Year 1. If demand is high for Year 1 units, then the
percentage change in prices after Year 1 can be higher due to
the stronger than expected demand. The reverse is true if unit
43. sales in Year 1 are owr than expected. In other words, the
percentage cahnge in prices after Year 1 is positively correlated
with the unit sales in Year 1. We incorporate this into the
model by forming a variable that is a weighted combination of
the standard normal variable for units in the 1st year and an
uncorrelated standard normal, with the "weights" in the
combination depending on the desired correlation.
Mike Ehrhardt: To "replicate" Figure 7 in the printed book, you
would need to copy these values into Column E, replacing the
random variables. If you do so, be sure to "undo" your change
so that the formulas for the random variables in Column E will
be restored.
Mike Ehrhardt: The RAND() function generates a random
number between 0 and 1. When this value is the argument in the
NORM.S.INV function, the NORM.S.INV interprets the value
as the cumulative probability of a standard normal distribution.
Then the NORM.S.INV function finds a standard normal
variable Z such that its the probability of drawing a value of Z
or less is equal to the argument. This means the formula
=NORM.S.INV(RAND()) returns a random standard normal
variable.
Mike Ehrhardt: This column counts the umber of simulation
trials with NPVs greater than the bottom of range and less than
top the top of the range.
Mike Ehrhardt: This column of data contains the ranges into
which the NPV's are grouped. The numbers shown are the
bottoms of each range. The ranges are automatically selected so
that the ranges will fit the data for the particular simulation.
Mike Ehrhardt: Do not delete or change this cell or
row.Average$0$00ERROR:#DIV/0!Standard
deviation$0$00ERROR:#DIV/0!Maximum$0$00ERROR:#DIV/0
44. !Minimum$0$00ERROR:#DIV/0!Median$0$00ERROR:#DIV/0!
Probability of NPV > 00.0%$00ERROR:#DIV/0!Coefficient of
variationERROR:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV
/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!
$00ERROR:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!$0
0ERROR:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!$00E
RROR:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!$00ER
ROR:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!$00ERR
OR:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!$00ERRO
R:#DIV/0!$00ERROR:#DIV/0!$00ERROR:#DIV/0!Sum-
0ERROR:#DIV/0!Average of simulated variables- 0- 0- 00.00%-
00.00%- 0- 0Std Dev of simulated variables00- 00.00%-
00.00%00Output of Simulation in Data TableTrial
NumberEquipment costUnits sold, Year 1Sales price per unit,
Year 1% Δ in sales price, after Year 1Var. cost per unit (VC),
Year 1% Δ in VC, after Year 1Nonvar. cost (Non-VC), Year
1NPV000000001000000002000000003000000004000000005000
00000600000000700000000800000000900000000100000000011
00000000120000000013000000001400000000150000000016000
00000170000000018000000001900000000200000000021000000
00220000000023000000002400000000250000000026000000002
70000000028000000002900000000300000000031000000003200
00000033000000003400000000350000000036000000003700000
00038000000003900000000400000000041000000004200000000
43000000004400000000450000000046000000004700000000480
00000004900000000500000000051000000005200000000530000
00005400000000550000000056000000005700000000580000000
05900000000600000000061000000006200000000630000000064
00000000650000000066000000006700000000680000000069000
00000700000000071000000007200000000730000000074000000
00750000000076000000007700000000780000000079000000008
00000000081000000008200000000830000000084000000008500
00000086000000008700000000880000000089000000009000000
00091000000009200000000930000000094000000009500000000
96000000009700000000980000000099000000001000000000010
10000000010200000000103000000001040000000010500000000