Microsoft Excel
Scenarios exercise
Average difficulty

This Microsoft Excel SCENARIOS exercise is provided to allow potential course delegates to assess their suitability for the Wise Owl EXCEL BUSINESS MODELLING course only, and may not be reproduced in whole or in part in any format without the prior written consent of Wise Owl.

Exercise: Showing summary of scenarios

A full answer to this exercise is provided as part of the training course!

1)	Download the files needed to start this exercise: exercise-668.zip (and click here if you experience any problems unzipping this file after downloading it).
2)	Open the file in the above folder.  This shows an investment appraisal model for a friend's business venture, in which you put in £40,000 at the end of year 1 and receive £10,000 back for 7 subsequent years.  At a discount rate of 8%, the Net Present Value of the investment is £11,170.
3)	Create formulae which bring the NPV and IRR onto the inputs sheet (this is necessary because a scenario can not change cells on one sheet and compare results cells from a different sheet):
	Give your two cells range names as shown
4)	Create the following 3 scenarios: Smaller dividends - the income for the 7 subsequent years is £9,000 only Higher initial investment - the original outgoing is £60,000, not £40,000 Interest rate rise - the discount rate is 10%, not 8%
5)	Which of these scenarios would produce the lowest NPV, do you think?
6)	Create a summary report showing the NPV and IRR for each scenario:
	Raising the initial Outlay had the worst effect of the NPV, but all of the scenarios lowered it
7)	Save your workbook with the same name, then close it down.

Thank you for showing an interest in this Excel Business Modelling training course! As mentioned above, full answers to this and other exercises are provided on the course. On all Wise Owl scheduled courses delegates can take away these model answers (together with their own efforts!) on a free USB stick.

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