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Excel What-If Analysis for Finance

This document discusses using Excel financial functions and what-if analysis to evaluate financing and investment alternatives. It introduces tools like PMT, FV, NPV and IRR to calculate loan installments, total costs, and evaluate the best financing option for a company building a new wind power plant. The lesson objectives are to understand what-if analysis and use functions like PMT and FV along with scenarios, goal seek and naming cells to choose the optimal mortgage from various bank offers to finance the project. Files provided include slides, a starting and solved Excel workbook, and an assignment.

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76 views8 pages

Excel What-If Analysis for Finance

This document discusses using Excel financial functions and what-if analysis to evaluate financing and investment alternatives. It introduces tools like PMT, FV, NPV and IRR to calculate loan installments, total costs, and evaluate the best financing option for a company building a new wind power plant. The lesson objectives are to understand what-if analysis and use functions like PMT and FV along with scenarios, goal seek and naming cells to choose the optimal mortgage from various bank offers to finance the project. Files provided include slides, a starting and solved Excel workbook, and an assignment.

Uploaded by

ka
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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COMPUTER SCIENCE

code 30424 a.y. 2018-19

Lesson 5
What-if analysis: solving financing and investing problems

SEDIN
IT Education Services Center
2

Objectives of the lesson


• Understand the meaning of what-if analysis and the tools
available in the spreadsheet

• Learn how to use Excel financial functions to solve financing and


investing problems
3

Financial functions
• They allow to make calculations that are typical of financial math
and corporate finance, without manually setting up complex
calculations and formulas
• They allow to calculate installments, interest rates, payments,
amortizations and to evaluate investments, loans etc.
• Examples: PMT, FV, RATE, IPMT, NPV, IRR
4

Our case
Evaluation and choice of financing and investing alternatives:
• Clean Energy Inc. wants to build a new wind power plant to
produce electricity
• A mortgage is needed to finance the project, and it has to be
chosen among the various products offered by different banks
5

Development
To solve the problem we have to:
1. Calculate the installment and total cost of each mortgage
2. Search for the best alternatives available
3. Use some tools of what-if analysis for choosing the best
financing alternative
4. Evaluate an investment
6

Tools to learn with today’s lecture


• Financial functions: PMT, FV
• Naming cells and ranges
• Paste command options (Transpose)
• Scenarios
• Goal seek
7

Files of the lesson


In the zip file 30424 ENG - 06 - Lesson 5.zip you will find these files:
• 30424 lesson 5 slides.pdf: these slides
• Evaluation.xlsx : starting file of the lesson
• Evaluation solved.xlsx : solved file
• Assignment 30424 lesson 5.pdf: mock-up questions of the exam
8

Book references
Computer skills handbook for economics, third edition:
Chapters n. 4.5.1, 4.5.5, 5.1.1, 5.1.3, 5.1.4

Excel workbook, second edition: All the exercises of unit 4

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