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Exhibit 1.2 Julia’s initial workbook
Exhibit 1.3 Julia’s initial workbook with cell formulas
Her calculation of Cost of Goods Sold Expense (COGS) is not quite as simple
to determine. There are two equally possible percentages, 40 or 80%, that can be
multiplied times the Sales Revenue to determine COGS. Rather than select one, she
has decided to use a percentage value that is at the midpoint of the range, 60%. Thus,
she has made some assumptions in her calculations that may need explanation to the
client, yet there is no documentation of her reasons for this or any other assumption.
Additionally, in Exhibit 1.3 the inflexibility of the workbook is apparent—all
parameters and variables are imbedded in the workbook formulas; thus, if Julia
wants to make changes to these assumed values, it will be difficult to undertake.
To make these changes quickly and accurately, it would be wiser to place these
parameters in a central location—in a Brain —and have the cell formulas refer to
this location. It is quite conceivable that the client will want to ask some what-if
questions about her analysis. For example, what if the unit price range is changed
from 4, 5 and 6 dollars to 3, 4, and 5 dollars; what if the most likely Sales Volume
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