Microsoft Office Tutorials and References

In Depth Information

**REVIEW OF EXCEL BASICS**

Answers to the Questions about Borrowing and Repayment

Figures C-50 and C-51 display solutions for the borrowing and repayment calculations.

FIGURE C-50

Answers to examples of borrowing

In Figure C-50, the formula in cell D2 for the amount to borrow is =IF(B2>=C2,0,C2-B2).

FIGURE C-51

Answers to examples of repayment

In Figure C-51, the formula in cell E10 for the amount to repay is

=IF(B10>=C10,IF(D10>0,MIN(B10-C10,D10),0),0).

Note the following points about the repayment calculations shown in Figure C-51.

In Example 1, only $2,000 is available for debt repayment ($12,000 – $10,000) to avoid dropping

below the Minimum Cash Required.

In Example 2, only $3,000 is available for debt repayment.

In Example 3, the Beginning-of-Year Debt was zero, so the Ending Cash is the same as the Net

Cash Position.

In Example 4, there was enough cash to repay the entire $40,000 debt, leaving $20,000 in

Ending Cash.

In Example 5, the company has cash problems

it cannot repay any of the Beginning-of-Year

Debt of $10,000, and it will have to borrow an additional $30,000 to reach the Minimum Cash

Required target of $10,000.

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You should now have all the basic tools you need to tackle Scenario Manager in Cases 6 and 7.

Good luck!