Microsoft Office Tutorials and References
In Depth Information
Functions for Investment Analysis
11. Enter the cost, salvage value, and useful life at the top of the work-
sheet.
22. Enter the date on which the equipment is placed in service in cell B4.
33. Enter dates for the first quarter in cells A7 and B7. The value in cell
A7 is the date the unit is placed in service. Manually figure out the
last date of the quarter for cell B7.
44. Ensure that the formula for columns A and B in each subsequent row
is the same. In cell A8, enter =B7+1
=EOMONTH(A8,2).
The EOMONTH function reports the end of the month that falls two
months after what is shown in cell A8. Copy these formulas down as
far as necessary.
55. To build the VDB function, use the normal values for cost and sal-
vage value. Instead of 7 for life, use 7 × 365 to have the function cal-
culate a daily depreciation rate.
66. For start_period, use the date in column A minus the date in service.
77. For end_period, use the date in column B minus the date in service.
88. If you are using the double-declining-balance method, omit the fifth
and sixth arguments.
99. Copy the VDB function down to all your rows.
The table in Figure 13.12 shows the depreciation to be booked each quarter for
this particular piece of machinery.
=B7+1. In cell B8, enter =EOMONTH(A8,2)
Functions for Investment Analysis
The invention of the computer spreadsheet in 1979 enabled the rapid growth
of the mergers and acquisitions business in the 1980s. Business plans can be
modeled in Excel, with the resulting series of net income values discounted
to determine the current value of a business. Excel offers a wide array of
functions that you can use to analyze a business investment.
Note
If you happen to work for a French-owned company, keep in mind spe-
cial considerations when calculating depreciation. Read the Help top-
ics for AMORDEGRC and AMORLINC to understand these methods that
have been added to Excel to accommodate the French accounting rules.
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