MGMT 2080 Introduction to Information Systems
Excel Exercise 1
ABC Trailer Manufacturing Company, a nationally recognized trailer manufacturer in the Cedar Falls, IA,
produces a wide range of quality standard and custom-built trailers including golf cart, gooseneck, dump
and bumper pull trailers. Although the company uses state-of-the-art information systems for most of its
business operations, its custom order tracking process is mainly manual-based and requires major
renovation. Management has found that the process is ineffective, time consuming, and costly. In an
effort to improve the process, management now considers developing a custom order tracking system. A
project team is created to conduct an economic feasibility analysis, analysis for examining the financial
viability of a project, for presenting the analysis results to management. Ms. Christine Larsen, the project
manager asks you to construct an economic feasibility analysis worksheet that summarizes the benefits,
costs, and rates associated with the project and calculates the revenue streams of the project. The figure
below summarizes the benefits and costs identified by project team.
The new order tracking system is expected to increase sales, improve order processing speed, and
provide better data management and streamline activities as well as decrease storage, staff, and order
rework expenses. However, it also incurs both system development costs and operational costs. System
development costs are one-time costs occurred during the development of the system, while operational
costs are recurring costs throughout the useful life of the new system. Development costs include
development labor, training, project-related technology purchases, office space and equipment, and
miscellaneous costs. Operational costs include software license, hardware, supplies, new IT positions
and site rental costs.
Part 1: Build the worksheet
MGMT 2080 Excel Exercise 1
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A. Download ABCManufacturing.xlsx file from the course website
(http://business.uni.edu/iss/mgmt2080/) and save it into your computer.
B. Create the economic feasibility analysis section of the worksheet. Starting in column F, row 1, enter
the labels shown below down column F. Widen column so that the labels are fully displayed in that
column.
ABC Trailer Manufacturing Company
Author:
Economic Feasibility Analysis
(skip two rows)
Benefits
Increased Sales
Faster Order Processing
Better Data Management
Streamline Activities
Decreased Storage
Reduced Staff
Reduced Order Rework
Total Benefits
Development Costs
Development Labor
Training
Technology Purchases
Office Space/Equipment
Miscellaneous Costs
Total Development Costs
Operational Cost
Software License
Hardware
Supplies
Site Rental
New IT Positions
Total Operational Costs
Total Costs
(skip one row)
Total Revenue
Net Cash Flow
C. In cell G2, enter your name. Enter Year in cell G4 and select G4:L4 and merge & center the cells.
Enter 0, 1, 2, 3, 4, 5 in cells G5, H5, I5, J5, K5, and L5 respectively.
D. In the benefits section of the Economic Feasibility Analysis worksheet, each year’s benefits must be
calculated. Enter a formula in cell H7 for the increased sales of year 1, then copy it down to the
remaining benefits (hint: since the benefits start occurring after systems are developed and
implemented, there are no benefits in year 0).
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E. The benefits recur throughout the useful life of the new system. The custom order tracking systems
life span is expected to be 5 years. Each benefit’s value of year 2 is determined by starting with the
value of year 1 and applying the benefit growth rate found in cell D7. Enter a formula in cell I7 for the
Increased Sales, then copy it down to the remaining benefits. Be certain you use relative and absolute
addressing correctly in your formula. Assuming the same benefit growth rate for year 3~year5, select
I7:I13 and then copy it to J7:L13.
F. In the Total Benefits row, insert =SUM functions to compute the total benefits for year 0 to year 5.
G. The development costs only incur one time during the start up and development of a project. In cell
G16, create a formula to insert the value of development labor cost (B16) and copy it down to the
remaining development costs.
H. Insert = SUM function to G21 that computes Total Development Costs.
I.
In the Operating Cost section, Software license, Hardware, Supplies and Site rental expenses recur
from year 1 to year 5. Select H23 and insert a formula to refer to Software license expense of the
“Input” area (B23) and copy it to I23:L23 (Hint: use absolute cell reference). Along the same manner,
fill H24:L27 for Hardware, Supplies, Site rental, and New IT Positions expenses respectively.
J.
In the Total Operating Costs row, use =SUM functions to compute the total Operating Costs for year
1 to year 5.
K. In the Total Costs row, insert a formula that computes Total Costs. Total Costs = Total Development
Costs + Total Operational Costs.
L. Compute Total Revenue by subtracting Total Costs from Total Benefits.
M. Compute the current year’s Net Cash Flow by adding the previous year’s Net Cash Flow to the
current year’s Total Revenue.
Net Cash Flowyear i = Net Cash Flow year i-1 + Total Revenue year i, i = 1, 2, 3, 4,5
For example, Year 1’s Net Cash Flow (H32) = Year 0’s Net Cash Flow (G32) + Year 1’ Total Revenue
(H31) (Caution: For Year 0’s Net Cash Flow, there is no previous year’s Net Cash Flow, so just typed
Year 0’s Total Revenue into G32. The formula is only applied from year 1 to year 5 (H32:L32)).
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Part 2: Formatting – Enhance the appearance of the worksheet
A. Follow the examples below to format the input area of the worksheet.
14 pt, white text, dark grey fill
Merge & Center
13 pt, Medium grey fill
Merge & Center
12 pt, Italic, Light grey fill
Merge & Center
Percent, no decimal
Dollar, no decimal
12 pt, Italic, Light grey fill
Merge & Center
12 pt, Italic, Light grey fill
Merge & Center
B. ABC Management wants to generate optimistic, realistic and pessimistic views of net cash flow
because they know that the benefit growth rate changes frequently depending on market condition,
significantly affecting net cash flow. To help the management see changes of positive and negative
cash flows, conditionally format the net cash flow values (G32:L32) using the following formatting
rule:
 If the Net Cash Flow value is less than 0, display the cell value as Bold Italic Red and place a
double underline.
 If the cell value is greater than or equal to 0, display the cell value as Bold Blue and place single
underline.
*You will not get points if you do not use conditional formatting feature.
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Part 3: Print and Upload
A. Select F1:L32 and go to Print and select the selected area and portrait mode option and print the
worksheet on one page. Gridlines do not have to be included.
B. Display the formulas on the worksheet (Hint: Select the Formulas group tab, then select Show
Formulas from the Formula Auditing group (or, use the CNTL+ ~ keys). Adjust the column widths
(if necessary) so that the formulas are fully displayed. Highlight the range F1:L32, then use Print
Preview and Page Setup to print just the selected range on one page, landscape mode. Include
gridlines and row and column headings on this printout. Submit the printed pages to your
instructor.
C. Submit the completed worksheet file (ABCManufacturing.xlsx) using Google Drive.
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