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Software ==> | Excel (113 exercises) |
Topic ==> | Scenarios (2 exercises) |
Level ==> | Average difficulty |
Subject ==> | Excel training |
This exercise is provided to allow potential course delegates to choose the correct Wise Owl Microsoft training course, and may not be reproduced in whole or in part in any format without the prior written consent of Wise Owl.
Open the file within the folder named above. This shows an investment appraisal model for a friend's business venture, in which you put in £40,000 at the end of year 1 and receive £10,000 back for 7 subsequent years. At a discount rate of 8%, the Net Present Value of the investment is £11,170.
Note there are duplicate NPV and IRR on the inputs sheet (this is necessary because a scenario can not change cells on one sheet and compare results cells from a different sheet):
Don't forget to give your cells range names.
Create the following 3 scenarios:
Smaller dividends - the income for the 7 subsequent years is £9,000 only
Higher initial investment - the original outgoing is £60,000, not £40,000
Interest rate rise - the discount rate is 10%, not 8%
Which of these scenarios would produce the lowest NPV, do you think?
Create a summary report showing the NPV and IRR for each scenario:
Raising the initial outlay had the worst effect on the NVP, but all scenarios lowered it.
Use Save As... to save the file in your own new Excel work folder.
You can find other training resources for the subject of this exercise here:
Kingsmoor House
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