Student Name……………..…………………………………………………...
BSBITU402A Develop and Use Complex spreadsheets
ASSESSMENT EVENT/S- WEIGHTING 100%
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Course: Diploma Financial Services Financial Planning
8th November 2011
Version 1
Meadowbank TAFE – NSI
Page 1 of 10
Assessment Section
There are five tasks. The first task only requires you to answer the multiple choice questions
based on your spreadsheet formulas. Tasks two, three, four and five will require you to design
and write a spreadsheet then e-mail or upload your completed spreadsheet files to your
teacher.
Your teacher will be assessing your spreadsheet design and layout. They will be asking the
following questions:
 Is it a well structured spreadsheet?
 Could someone open the file and understand what the spreadsheet is attempting to
achieve?
 Are the formulas producing the required results?
How long will it take me? The best estimate is somewhere between 10 and 30 hours. That
sounds like a lot but if you were doing the subject in a class you would be turning up to around
32 hours of classes and most likely be doing extra work on top of that to complete your
assignments.
One tip – did you know you can copy (highlight and Ctrl +C) from the multiple choice formula
options in this file below for example …..=(Data!E3-(Data!G12/Data!G14))*Data!G14 or
=((Data!G12/Data!G14)-Data!E3)*Data!G14
You can then paste the formula directly in to the Formula bar in the Excel spreadsheet (select
the formula bar and Ctrl +V) and see if it works- knowing that one of the four options should
be correct. You will still need to study and think about the logic of the formula but at least you
won’t have to type the formulas in.
Course: Diploma Financial Services Financial Planning
8th November 2011
Version 1
Meadowbank TAFE – NSI
Page 2 of 10
Task 1
Loan Calculator
You would like to borrow $250000 to buy some land. The current interest rate is 8.3% and you
would like to pay the loan back over twenty five years.
Required:
Design a spreadsheet that allows you to enter the data above and write a formula that will
calculate your weekly repayments. Assume this is a standard loan where the first repayment
is not due until the end of the first period.
Use the suggested cell references for the input cells in Multiple Choice Question 1.below.
Note – Exercise 6 in the Intro to Spreadsheet File should help you visualise what we’re trying
to achieve here.
Multiple Choice Questions for Task1 Loan Calculator
(1) If the $250,000 loan amount was in cell D10 and the term of the loan in years - 25 was in
cell D11 and the interest rate of 8.3% was in cell D12
The best formula to calculate the weekly repayment amount is (2 Marks)
(a)
(b)
(c)
(d)
(e)
=PMT(D12,D11*52,-D10,0)
=PMT(D12/52,D11*52,-D10,0)
=PMT(8.3/52,25*52,-250000,0)
=PMT(8.3,25,-250000,0)
None of the above
(2) The weekly repayment amount from the correct formula above is (2 Marks)
(a) $432.44
(b) $449.44
(c) $448.44
(d) $456.44
(3) You have looked at your finances and realise you can afford to repay $490 per week.
Assuming all other data remains the same use goal seek to find the maximum amount you
can borrow. Assuming the Weekly repayment formula is at D14.
The steps to using Goal Seek are
(2 Marks)
Excel 2007 users
(a) Select D14, Data, What if Analysis, Goal Seek , Set D14, To value, 490, by changing D10
(b) Select D11, Data, What if Analysis, Goal Seek, Set D11, To value, 490, by changing D12
(c) Select D12, Data, What if Analysis, Goal Seek, Set D12, To value, 490, by changing D11
(d) Select D10, Data, What if Analysis, Goal Seek, Set D10, To value, 490, by changing D11
Course: Diploma Financial Services Financial Planning
8th November 2011
Version 1
Meadowbank TAFE – NSI
Page 3 of 10
Versions other then 2007
(a) Select D14, Tools, Goal Seek, Set D14, To value, 490, by changing D10
(b) Select D11, Tools, Goal Seek, Set D11, To value, 490, by changing D12
(c) Select D12, Tools, Goal Seek, Set D12, To value, 490, by changing D11
(d) Select D10, Tools, Goal Seek, Set D10, To value, 490, by changing D11
(4) The solution from using Goal Seek on the amount you can borrow if you can only afford to
repay $490 per week is (2 Marks)
(a) $549680
(b) $268380
(c) $269680
(d) $268480
(5) If you borrow $250000 and the interest rate drops from 8.3% to 5.8% how much will your
repayment per week be reduced..(2 Marks)
(a) $93.05
(b) $39.50
(c) $94.09
(d) $92.05
(6) You want to make sure you can cover your repayments if the interest rates climb to 11.5%.
If the most you can afford on your loan repayments is $490 per week what is the most you
should borrow? (2 Marks)
(a) $609395
(b) $309395
(c) $48794.0
(d) None of the above
Course: Diploma Financial Services Financial Planning
8th November 2011
Version 1
Meadowbank TAFE – NSI
Page 4 of 10
Task 2
Valley View Wages – producing a Summary Sheet
Open the file ValleyViewWageskey(1).xls.
Produce a summary sheet that will combine Weeks 1 to 4 and show the
total pays for the month.
Task 3 – When can you retire?
You have completed a budget and have estimated you would be satisfied with an income
stream of $50,000 per year.
The following calculation ignores inflation and taxation. If you could earn a return of 8% on
your invested funds per annum then using the concept of perpetual annuities, we divide the
income stream by the rate of return and we will have found the lump sum we would need to
invest. That is : 50000 / .08 = 625000.
Open up the spreadsheet file “How much do I need to retire.xls”.
Have a look at the section from row 11 to 20 this demonstrates that without inflation the
$625000 will last forever. Now look at 28 to 44 it shows that with inflation of 5% per
annum your Living costs will increase and $625000 will be eroded. The lump
sum of $625000 will only provide for your perceived needs for just over 16 years
Required
Use a similar table to the one demonstrated in the range C25 to G44
along with the goal seek function to solve the following problem.
You estimate (1) you need an income stream for 30 years, (2) the long
term inflation rate to be 5%, (3) you can earn an average of 8% p.a. on
your investment.
What lump sum will I need before you can retire? (Write your answer here
but attach your spreadsheet as well)
Course: Diploma Financial Services Financial Planning
8th November 2011
Version 1
Meadowbank TAFE – NSI
Page 5 of 10
Task 4 – How much should I start saving now to generate
the lump sum I need to retire?
There are at least three ways to solve this problem
(1) Using formulas similar to those displayed in one or more of the
worksheets in the file “Complex Spreadsheets Macro demo 2.xls”
(2) Using Excel’s specifically designed finance formulas or
(3) Using Goal Seek in conjunction with a spreadsheet similar to Exercise
7 described in the note below.
You have worked out your ideal retirement age and realised it is 15 years away. Assuming
you have used a similar approach to Task 3 above and have estimated you need a lump sum
of $450,000 in 15 years time, and can earn an average of 9% per annum with a balanced
portfolio of shares and fixed income investments how much do you need to invest each month
to achieve this goal?
(Write your answer below but also attach your spreadsheet)
The amount I would need to invest each month is ...................................................
Note – check your answer carefully – most financial formulas require you to convert the years
to the number of periods (weeks or months – multiply number of years by 52 or 12
respectively) and to convert the interest rate per annum to an interest rate per period – for
example an interest rate of 12% per annum becomes 1% per month.
Always check your answer for reasonableness – imagine the answer you found was $2500
per month – then if you multiply $2500 x 12 x 15 you have $450,000 – clearly this is wrong
because there is no interest earnings – so you know your monthly investment has to be less
than $2500.
Scroll down in Exercise 7 in the Intro to spreadsheet.xls file. You could design a simple
spreadsheet using a similar approach as Exercise 7 to watch your monthly investment grow. If
you take the time to do this you will be convinced your answer to task 4 above is correct.
Course: Diploma Financial Services Financial Planning
8th November 2011
Version 1
Meadowbank TAFE – NSI
Page 6 of 10
Task 5 - Flexible charting – Breakeven Analysis
Open the Spreadsheet file – Superjuice.xls
This spreadsheet is designed to find the breakeven point in number of 375ml drinks per week
given that the number of hours before workers are paid overtime is 40 hours per week.
A simple breakeven formula has been calculated for you on the calculation worksheet at C36.
The breakeven formula is Fixed Costs / (selling price per drink– variable cost per drink)
But first here are a couple of notes on the spreadsheet design
We have a nice logical layout to the spreadsheet file – with a Data sheet, a Calculation sheet,
a Result sheet and a Graph sheet.
Formulas have been written for the following calculations on the calculation sheet - Fixed
Costs per week, Variable Costs per Drink in Normal Hours, Variable Costs per Drink in
Overtime Hours and the Profit or Loss in Normal Hours.
Cells have been named for example “Selling_Price” and “Target_Profit”, etc. The reason for
this is so we don’t have to continually flick back to cells to work out if we have picked up the
right data. Instead of our formulas looking like this : =(D5+G11)/ (H54- G19) you’ll see
=(Fixed_Costs + Profit)/(Sell_Price-VC_Normal) in the formula bar.
The formulas are flexible, that is when writing spreadsheet formulas we should almost never
see a fixed figure in a formula – everything in our formulas should link back to the data sheet.
For example in calculating the power costs for the crushing & mixing machine we should not
see the total power costs for the machines divided by 3 but divided by the number of Crushing
& Mixing machines per the input sheet. That way if we buy more machines the user only has
to vary the inputs and the formulas will still be accurate.
Required
(a) If all of the data was to remain the same and only the selling price per 375ml
drink was allowed to change what is the minimum selling price per drink
below which overtime would be required to breakeven?
Note (1) You’ll need to study the spreadsheet for a while to work out how it was designed.
(2)change the selling price to $1.00 notice cell B29 on the calculation sheet now says “Loss in
Normal Hours”)
To test the break even formula hold everything else constant and drop the selling price and
see what happens if overtime is required. A shortcut method would be to use Tools/ Goal
seek and set your profit in normal hours formula to zero by changing the selling price.
Course: Diploma Financial Services Financial Planning
8th November 2011
Version 1
Meadowbank TAFE – NSI
Page 7 of 10
Clearly our simple breakeven formula is not accurate – it hasn’t allowed for the possibility of
overtime.
(b) Write a better formula at cell C36 that will calculate the number of 375ml
drinks that must be sold to breakeven if you are forced to produce beyond 40
hours per week to breakeven.
(Hint – We will need an “IF” statement to test whether overtime is required.
One method to calculate whether overtime is required to breakeven is to write a formula that
will calculate the profit or loss in normal hours. If we are making a loss in normal hours we
won’t be able to breakeven without working overtime. The loss represents that portion of fixed
costs we haven’t been able to cover in Normal Hours.
The correct breakeven point will be the number of drinks required to generate the loss in
Normal hours plus the number of drinks required to cover the loss at overtime rates. (Loss /
SP – VC OT).
You may have to combine the ABS formula here as well to wipe out the negative loss figure –
that is if the loss was 100, selling price was 20 and VC OT was 10 then = -100/ (20-10) –
gives us negative10 litres to cover the loss which is incorrect – we need =abs(-100)/(20-10)
that is 10 litres to cover the loss plus however many litres we could produce in normal hours.
(c) Review the Breakeven graph in the Graph worksheet. It’s OK in that it has the
Breakeven point in the middle of the graph. The problem is the Horizontal
axis is not flexible or linked to the range of data supplied.
To test this change the Selling price on the Data worksheet at C4 from $1.95 to
$3.00 and note the change in the graph. The graph should be in the shape you
see when the selling price is $1.95.
Write some formulas in cell E4: E10 and E9: E13 that will enable the graph to
have an even horizontal axis scale.
Hints: When you are designing the table to graph your breakeven point, draw up a rough
table to help write a formula that will ensure the breakeven point is in the middle of the graph.
For example if the breakeven point is 5000 drinks - we want 5000 drinks to appear in the
middle of the table and then we need a formula that will spread the number of drinks evenly
below the breakeven point to zero and above the breakeven point.
Since there are five numbers below 5000 and five above we want the number directly below
5000 to be 1/5 less than 5000 and the number directly above 5000 to be 1/5 above 5000. If
the breakeven point changes to 8000 units we want 8000 to be in the middle and the number
directly below it to be 1/5 less than 8000 etc. That’s enough hints – it’s your turn now.
Congratulations – you have finished your assignment. All you need to do now is copy
and paste the following Multiple Choice Answer sheet in an e-mail to your teacher and
attach your
Task 2,3 and 4 Spreadsheet files.
Course: Diploma Financial Services Financial Planning
8th November 2011
Version 1
Meadowbank TAFE – NSI
Page 8 of 10
Multiple Choice Questions for Task1 Loan Calculator (12 Marks)
Question
Answer
1
2
3
4
5
6
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Hyperlinks Don’t work properly
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Field Codes
For more information about turning field codes on and off, see the appropriate Help reference
for your version of Word.
Word 2000 - Select Tools, Options, View and ensure that the “Field Codes” box is clear)
Word 97 - Click the Office Assistant, type "How do I view field codes?", click Search, and
then click to view the "Show or hide field codes" topic.
NOTE: If the Assistant is hidden, click the Office Assistant button on the Standard toolbar. If
Microsoft Help is not installed on your computer, please see the following article in the
Microsoft Knowledge Base:
MORE INFORMATION – SYMPTOMS
You cannot toggle (view) field codes in a protected form because:
• The Field Codes option on the View tab is unavailable (dimmed).
-or• ALT+F9 causes your computer to beep and does not turn field codes on and off.
CAUSE
This behavior is by design of Microsoft Word. When a document is protected for forms, Word
turns off (disables) the Field Codes option.
Course: Diploma Financial Services Financial Planning
8th November 2011
Version 1
Meadowbank TAFE – NSI
Page 9 of 10
WORKAROUND
To view the field codes in a protected form, unprotect the document and then select the Field
Codes option.
To locate the Field Codes option, click Options on the Tools menu, and then click to select the
View tab
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Course: Diploma Financial Services Financial Planning
8th November 2011
Version 1
Meadowbank TAFE – NSI
Page 10 of 10