BCS 450 - Project Cost-Benefit Analysis*
This assignment includes pictures of an example spreadsheet for cost-benefit analysis. The spreadsheet contains these
worksheets:
1) Documentation
2) Input_Values
3) Cost-Benefit
4) Break-Even Chart
5) Macros (optional)
Create an Excel spreadsheet that duplicates this example. Use the following steps and instructions.



Rename each worksheet to match the names listed above (drop the “optional,” though).
On the Documentation worksheet simply type in the same text that appears in the example.
On the Input_Values worksheet enter the example text shown to start with.





Enter the example values for the development costs, operating costs, and the benefits.
Enter a formula that totals the development costs (you can use the SUM function or build a simple formula
that adds each development cost cell). Also, create a formula that totals operating costs and a formula that
totals the benefits.
You don’t have to duplicate the shading shown for the input cells but you may.
After you’ve created the rest of the spreadsheet, you’ll need to modify the numbers to show everything
recalculates correctly.
On the Cost-Benefit worksheet create the same cost-benefit analysis.



There are two pictures of the example Cost-Benefit worksheet. One picture shows the regular view of the
spreadsheet. The other shows the underlying formulas. (Note the dollar signs! Do you know why these
are used? Do you know the difference between absolute and relative cell references in spreadsheets?)
If you duplicate the example spreadsheet EXACTLY (same columns and rows, exactly), your spreadsheet
will work just like the one shown.
Keep in mind that the number one (1) looks a lot like the letter I.

The only cells people should be able to modify are the data in the Input_Values worksheet: the discount
rate, the recurring economic benefit, the recurring costs, and the one-time costs. The remainder of the
worksheet should be protected against changes. The steps below tell how to protect most of a worksheet
from changes but still leave a few cells open for input.
Excel 2007 or higher:
1.
2.
3.
Highlight any cells that you want to remain open for editing. (You can highlight them individually or all at
once.) In this example worksheet you would highlight B3 through B7, B10 throuh B12, B14 though B15,
and B18 in the Input_Values worksheet.
Select the HOME tab in the ribbon area and select Format … Format cells. Select the Protection tab.
Uncheck the Lock setting and click OK. Unchecking “locked” this means these cells will remain “unlocked”
when worksheet protection is turned on.
To protect all the cells in the worksheet that aren’t “unlocked”, from the HOME tab, select Format …
Protect Worksheet. I strongly recommend that you not password this worksheet.

Test whether you can change the input cells and whether the remaining cells can’t be changed. Note: Any time
you need to edit this worksheet, simply turn the worksheet protection off. Make the changes. Turn the
protection back on. For this assignment, make sure the worksheet protection is turned on when you submit the
spreadsheet.

In the Break-Even Chart worksheet, display the NPV values for benefits and costs in the chart worksheet by
using the “=” formula to carry the values from the Cost-Benefit worksheet into the Break-Even worksheet.
1. Put the cursor in a cell of the chart worksheet, type the equal sign, then click the cost-benefit worksheet tab
and select the cell that contains the value you want to appear in the chart.
2. To finish this one-cell formula just hit ENTER. The same number in the cost-benefit worksheet will appear
in the chart worksheet.
533581331
1
Displaying values together in one consecutive area of the Break-Even worksheet will make them easier to
graph. Using the “=” formula and referencing the calculated values in the Cost-Benefit worksheet also means
any change in the cost-benefit calculations will automatically show up in the Break-Even worksheet and chart.

Do NOT put blank columns or rows in the cells you use to hold the graphing data.

For the cost numbers, which are negative, enter a minus sign before pointing to the cell in the other
worksheet. That will make the value positive, which is what you want for the graphing.

To get the x-axis labels to start with zero instead of the number one, do the following:
1. Right click the graph and select Source Data ...
2. Select the Series tab.
3. Near the bottom of the dialog box you can change the values for the X axis labels. Click on the small
red arrow to the right of the blank box, puts you back in the spreadsheet in the point-and-click mode.
4. Highlight the series of numbers (0-5) shown above the net present values, then click the small red
arrow to return to the dialog box. Close the dialog box and the graph should show your changes.
Excel 2007:
1. Right-click the X-axis series (1..2..3..). Select Format Axis. Under the heading “Axis Type” select Text
Axis. Click close.
2. Right-click the X-axis series again and Select Data. For the Horizontal Axis, edit and reselect the cells
with 0 through 5.

The Macros worksheet is optional. I recommend listing the macros on a worksheet as a way to document macros—
so people can easily see what macros there are, what they do, and how to execute them.
Since Excel spreadsheets are taught in BCS 110 and CS 110, this assignment is written with the assumption that you’re
familiar with the commonly used features of Excel. Please ask questions or come see me if you want assistance with
Excel.
The cost-benefit spreadsheet you create in this assignment is a good, general template you can use for analyzing
whether a proposed project is justified based on tangible benefits (remember, there are intangible benefits not shown
here).
533581331
2