Microsoft Office Tutorials and References
In Depth Information
ASSIGNMENT 1: CREATING A SPREADSHEET FOR DECISION SUPPORT
Constants Section
Your spreadsheet should include the constants shown in Figure 7-1. An explanation of the line items follows
the figure.
FIGURE 7-1
Constants section
￿
Tax Rate
The tax rate is applied to income before taxes. The rate is expected to increase each
year.
￿
Minimum cash needed to start year
You want to have at least $25,000 in cash at the beginning
of each year. Your banker will lend you the amount you need at the end of a year in order to
begin the new year with $25,000.
￿
Fixed Costs
These costs include rent, maintenance, insurance, electricity, and salaries for the
office worker and handyman. These costs do not fluctuate with changes in production. They are
expected to increase each year.
￿
Health care cost per employee
The insurance company will charge $3,000 per covered
employee in 2012, and more in succeeding years.
￿
Interest rate
Your bank charges interest on any borrowing. Your banker says that interest rates
are expected to rise as the economy continues to recover.
Inputs Section
Your spreadsheet should include the following inputs for the years 2012, 2013, and 2014, as shown in Figure 7-2.
FIGURE 7-2
Inputs section
￿
Expected cost of a barrel of oil
Enter the expected average cost of a barrel of oil in each year.
For example, you could enter 90, 100, and 110 to indicate a gradually increasing cost of oil. The
pattern 80, 70, 60 would indicate a gradually decreasing cost.
￿
Cover employee health care? (YES/NO)
Enter YES if employee health care will be paid for in
2012, 2013, and 2014. Otherwise, enter NO. The single entry applies to all three years.
Summary of Key Results Section
Your spreadsheet should include the results shown in Figure 7-3.
FIGURE 7-3
Summary of Key Results section
 
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