Exam 2: Introduction to Spreadsheet Modeling

A chart is typically much more informative to a business manager than the table of numbers it is based on.

An important property of the exponential function is that:

Many models are built for the purpose of permitting experimentation with various scenarios.

Which of the following is a useful tool for understanding and troubleshooting a spreadsheet model

Exhibit 2-2 A small sporting goods company is considering investing $2000 in a project at the start of year 1 that will produce volleyballs over the next five years. The company plans to produce and sell 200 volleyballs in the first year, and expects that volume to grow by 10% each year thereafter. The unit selling price forecast the company has developed is $20 in year 1, $22 in year 2, $25 in year 3, $28 in year 4, and $31.50 in year 5. Variable costs are forecast to be $15 per unit produced, and there will be a fixed overhead cost in each year of $500.  (Unless otherwise indicated, assume that all cash flows occur at the end of the year.) -Refer to Exhibit 2-2.Suppose instead that the company thinks it can reduce its variable cost rate.What rate would produce an NPV of $10,000

Exhibit 2-1 A t-shirt company is planning a production run for an event where the attendance (and thus demand for t-shirts) is uncertain. The event planners have indicated that they think the attendance will be 500, 750 or 1000, with probabilities of 30%, 50% and 20% respectively. The company must pre-order the blank t-shirts (cost=$5 per shirt) and it can sell finished shirts for $12 apiece. Any finished shirts that cannot be sold at the event can be sold for $2 apiece to a used clothing vendor. -Refer to Exhibit 2-1.Suppose that blank t-shirts can only be ordered from the wholesale vendor in batches of 100 How many t-shirts should the company order

The NPV function takes two arguments; the discount rate and the number of time periods in the model.

Trace Dependents and Trace Precedents are Formula Auditing commands.

Which of the following is not one of the components of most mathematical models

Which of the following is not one of the features that can improve the readability of a spreadsheet model

Which of the following is not one of the types of curve fitting models available in Excel's Trendline tool

A shortcut for establishing absolute references is pressing the F9 key.

Exhibit 2-1 A t-shirt company is planning a production run for an event where the attendance (and thus demand for t-shirts) is uncertain. The event planners have indicated that they think the attendance will be 500, 750 or 1000, with probabilities of 30%, 50% and 20% respectively. The company must pre-order the blank t-shirts (cost=$5 per shirt) and it can sell finished shirts for $12 apiece. Any finished shirts that cannot be sold at the event can be sold for $2 apiece to a used clothing vendor. -Refer to Exhibit 2-1.What are the two possible cases for the amount of t-shirts that will be sold to the used clothing vendor How would you calculate this amount in a spreadsheet model

Exhibit 2-1 A t-shirt company is planning a production run for an event where the attendance (and thus demand for t-shirts) is uncertain. The event planners have indicated that they think the attendance will be 500, 750 or 1000, with probabilities of 30%, 50% and 20% respectively. The company must pre-order the blank t-shirts (cost=$5 per shirt) and it can sell finished shirts for $12 apiece. Any finished shirts that cannot be sold at the event can be sold for $2 apiece to a used clothing vendor. -Refer to Exhibit 2-1.Suppose now that blank t-shirts can only be ordered from the wholesale vendor in batches of 50 How many t-shirts should the company order

Exhibit 2-2 A small sporting goods company is considering investing $2000 in a project at the start of year 1 that will produce volleyballs over the next five years. The company plans to produce and sell 200 volleyballs in the first year, and expects that volume to grow by 10% each year thereafter. The unit selling price forecast the company has developed is $20 in year 1, $22 in year 2, $25 in year 3, $28 in year 4, and $31.50 in year 5. Variable costs are forecast to be $15 per unit produced, and there will be a fixed overhead cost in each year of $500.  (Unless otherwise indicated, assume that all cash flows occur at the end of the year.) -Refer to Exhibit 2-2.Suppose the company thinks it may be able to produce and sell more than currently planned.What growth rate of production would produce an NPV of $10,000

Exhibit 2-2 A small sporting goods company is considering investing $2000 in a project at the start of year 1 that will produce volleyballs over the next five years. The company plans to produce and sell 200 volleyballs in the first year, and expects that volume to grow by 10% each year thereafter. The unit selling price forecast the company has developed is $20 in year 1, $22 in year 2, $25 in year 3, $28 in year 4, and $31.50 in year 5. Variable costs are forecast to be $15 per unit produced, and there will be a fixed overhead cost in each year of $500.  (Unless otherwise indicated, assume that all cash flows occur at the end of the year.) -[Part 2] Refer to Exhibit 2-2.Use the same scatterplot constructed for the previous question,fit an exponential trendline to the data.What are the coefficients of the exponential model,and what is the MAPE of an exponential model forecast,compared to the company's forecast

Which of the following is a useful tool for investigating what-if questions

In general,any cash flow occurring at the beginning of the first time period must be placed outside the NPV function.

The Excel tool for solving one equation with one unknown is:

Goal Seek is a means for answering a large number of what-if questions quickly and easily.