Microsoft Office Tutorials and References
In Depth Information
ASSIGNMENT 1: CREATING A SPREADSHEET FOR DECISION SUPPORT
Inputs Section
Your spreadsheet model must include the following inputs, which will apply for all three years, as shown in
Figure 6-2.
FIGURE 6-2
Inputs section
￿
Economic Outlook
This value is either Recession (R) or Boom (B). The economic outlook will
affect car sales volume; people tend to buy less during a recession.
￿
Gasoline Price Outlook
This value is either Low (L) or High (H). The price of gasoline has a
significant effect on what types of cars people buy. As gas prices rise, the demand for
alternativeenergy cars rises.
￿
Technology Selection
This value is the basic input for the strategic decision to build either the
proven Electric Hybrid (E) technology or the more innovative Fuel Cell (F) technology.
Summary of Key Results Section
This section (see Figure 6-3) contains the results data, which is of primary interest to the management team
at Future Cars Inc. It includes income and end-of-year cash on hand information, as well as the internal rate
of return (annualized) for a particular set of business inputs. This section summarizes the values calculated
from the Calculations, Income and Cash Flow Statements, and Internal Rate of Return Calculation sections.
FIGURE 6-3
Summary of Key Results section
For each year from 2013 to 2015, your spreadsheet should show net income after taxes (which will also
be the cash inflows for the IRR calculation) and end-of-year cash on hand. Because Future Cars is funding the
capital investment from its own cash on hand at the end of 2012, there is no debt to repay. However, the
company wants to know the IRR at the end of 2015.
Calculations Section
The Calculations section includes the calculations you need to perform to determine the number of cars that
Future Cars Inc. hopes to sell, the costs of making the cars, the period (nonmanufacturing) costs of running
the new product segment, and how the company plans to price its cars for each year. See Figure 6-4.
FIGURE 6-4
Calculations section
 
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