# Exercise: Showing summary of scenarios XL 07

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 Category ==> Excel 2010  (83 exercises) Topic ==> Scenarios  (1 exercise) Level ==> Average difficulty Courses ==> Excel Introduction  /  Advanced Excel  /  Excel Business Modelling
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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.

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

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%

Which of these scenarios would produce the lowest NPV, do you think?

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

Save your workbook with the same name, then close it down.