CS&E 2111
PRE LAB 4
Download from Carmen: Piedmont.xlsx EGPC.xlsx
ALL BEGINNING FILES MUST BE DOWNLOADED FROM CARMEN OR THEY WILL NOT BE ACCEPTED.
PART 1: PIEDMONT
Step 1: Open the file, Piedmont.xlsx and complete the spreadsheet rows 1-25
Set up the initial spreadsheet values for the Economic Feasibility Summary worksheet.
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The assumed Discount rate (cell B5) will be 14%
The Recurring value of benefits for year 0 (cell B9) will be $0.
The Recurring value of benefits for years 1-5 will be the same and will be referenced from the Tangible Benefits
worksheet.
o Therefore, in cell C9 you will enter or use the point and click method to input the following: ='Tangible
Benefit'!B13. Remember you will need a $ somewhere in this cell reference because you will copy it to cells
C9:G9.
o The Present value factor will start at 1; therefore you must input the number 1 in cell B10 and B17.
The One-Time Costs (cell B15) will be accessed from the One-Time Cost worksheet and will only occur at the
beginning of the project. You will not need a $ in the reference because you will not be copying that reference.
The Recurring costs for year 0 (cell B16) will be $0. Make sure it is formatted as currency.
The Recurring Costs (cells C16:G16) should be referenced from the Recurring Cost worksheet.
Cell B12 will be the sum of B9 and B11.
The total for the Overall Net Present value is the total from column H.
Step 2: Complete from the book, Modeling and Problem Solving, Case 1 (Piedmont Trailer Manufacturing
Company) pages 621-627.
Step 3: Continue working on the spreadsheet by completing the Cash Flow Analysis section on the top of page 481.
(Stop before the “Information Specifications” section.) Ignore the instructions telling you to protect the worksheet.
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Yearly NPV cash flow =Total present value of benefits + Present value of recurring cost
Overall NPV cash flow = Total Net value of all benefits + Net present value of all costs
Step 4: Read the Information Specifications Section and complete the following steps to complete the
worksheet. (Stop before the “Test Your Design” section.)
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The Internal Rate of Return in dollars (cell B27) for year 0 is the Net Present Value of All Benefits for year 0 +
Net Present Value of All Costs.
The Internal Rate of Return in dollars (cells C27:G27) for years 1-5 will be the Recurring Value of Benefits + the
Recurring Costs.
Use the following formula in cell H27 to calculate the Internal Rate of Return as a percentage
o =IRR(B27:G27)
o Make sure there are not green triangles displaying on your worksheet.
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Step 5: Create a chart to display the break-even point of the project.
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Create a new tab named Break Even Point
You will be using this worksheet to create a summation of the NPV of all benefits and costs so you can create your
break even analysis chart.
Type in the following information in the Break Even Point Worksheet
o Make sure to Center and merge cells A1:G1
Copy the NPV values from the Economic Feasibility Summary Worksheet to cells A3:G3
Notice the values in cells B4:G4 are multiplied by -1 in order to make both numbers positive. We need to do this
so the chart will plot correctly. Be sure to format the cell as currency.
o This worksheet doesn’t need much formatting because we are using it only to create our chart.
Highlight cells ‘Break Even Point’!A2:G4, click insertLine Click on the Line icon to create the following chart.
You can format each individual part of
the chart by clicking on that object to
select it and then right clicking to
display the format options. Try to make
the chart look as close to the one
displayed at the end of this lab, then
copy the chart from this worksheet and
paste it to the bottom of the Economic
Feasibility Summary worksheet.
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In cell A29 and B29 type the projected break-even point. (Shown in the figure of the completed spreadsheet.
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Step 6: Run Scenario Manager for the following: (Make sure to format)
Discount rate of 8%
Discount rate of 10%
PART 2: EDMUND GRANT PHARMACEUTICAL COMPANY
Complete from the book, Spreadsheet Programming for Business, Case 7 (Edmund Grant Pharmaceutical
Company, pages 519-522). Stop after the first paragraph on page 522.
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You will only be creating the expense worksheet and the lookup table for that worksheet using the
functions you have already learned.
You WILL NOT be using any of the other spreadsheet skills that are noted on the skills check so ignore any
directions that ask you to use these skills.
Pre Lab 4 Submissions
1. Piedmont.xlsx
2. EGPC.xlsx
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