Post on 19-Dec-2015
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Module 1 - Lecture 8Module 1 - Lecture 8
Spread sheet Spread sheet applications and applications and
training evaluationtraining evaluation Dr. Sayed KasebDr. Sayed Kaseb
Associate Professor, MPED, FECUAssociate Professor, MPED, FECU
Manger of Pathways to Higher Manger of Pathways to Higher EducationEducation
Grant Coordinator of VISION Grant Coordinator of VISION ProjectProject
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A new software will be injected in an existing company, It is
expected that the software will increase annual revenue over
that the current software by m.u.200000 for each of the next 2
years, and by m.u.300000 for each of years 3 and 4. The
planning horizon is only 4 years.
Develop spreadsheet to answer the following questions:
Example 8.1
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(a)Determine the equivalent future value in year 4 of the
increased cash flows, using an 8 % interest rate of return for
both simple and compound interest
(b) Rework part (a) if the flow estimates in year 3 and 4 increase
from m.u.300000 to m.u.600000.
(c) Consider the effects of 4% inflation in the analysis, hence the
rate of return from will be reduced from 8% to 3.85% per year
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a
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b
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c
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A person buys a piece of property for m.u.5000 down payment and deferred annual payments of m.u.500 per year for 6 years starting 3 years from now. How much would he pay if he decides to pay the entire price immediately? The interest rate is 8 %.
Example 8.2
Solution:
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6 2
P = 5000 + 500 (P/A, 8, 6) (P/F, 8, 2)
1.08 1 1 = 5000 + 500 ×
0.08 (1.08) 1.08
= m.u. 6981.69
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A principal P is deposited now in a bank with an interest rate of 4.5%. The principal is required to be completely recovered in the form of equal annual withdrawal of m.u.200 per year for the first 5years starting one year after deposit; then a different annual withdrawal of m.u.300/year for the following 3 years. Determine the value of P.
Example 8.3
1 2 3 4
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P = ??
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i= 4.5 % A = m.u.300
6 7
years
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A = m.u.200
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i 4.50%NPV 1539.77Cash Flow 200
200200200200300300300
Simple SolutionJust use NPV function
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For a nominal interest rate of 15% calculate the effective interest
rate if the interest is compounded:
Biannually, Quarterly, Monthly , and Continuously (m= ∞)
Example 8.4
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A company will make seven consecutive annual investments starting 3 years from now. The first investment is m.u.100000 and the investments decrease at an annual rate of 10 %. What will be the compound amount 14 years from now if the interest rate is 12 %? Determine the single investment that should be made now in order to yield the same amount 14 years ahead. Find the equivalent uniform series of 14 year-end investments which would result in the same amount at the same time. (NB: This example is same as that of example 6.7, however, two spreadsheet solutions will be introduced)
Example 8.5
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Simple SolutionJust use NPV function
E 10% i 12.00%
Years Annual PaymentsCash Flow 0 0
1 0 Payment No.2 100000 13 90000 24 81000 35 72900 46 65610 57 59049 68 53144 7
NPV 283961.46
n 14F -1387752A (P) -42842A (F) 42842
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A spreadsheet solution for example 7.6.
Plan APlan B
Machine 1Machine 2
First cost, m.u.90,00028,000175,000
Annual operating cost, m.u./year
6,0003002,500
Salvage value, m.u.10,0002,00010,000
Life, years81224
Example 8.6
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Determine the annual cash flow analysis for each of
Plan based 8% interest rate for the cash flow shown in
the table below. Plans A, B, and C has a ten-year life
and a scrap value equal to 10% of its original cost. Also
find the capitalized profit for each plan.
Example 8.7
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Table 8.2: Cash flow of Plans A, B and C for example 8.7
Plan APlan BPlan C
Installed cost of equipment m.u.150002500033000
Material and labor saving per year m.u./year
14000900014000
Annual operating expenses m.u./year
800060006000
Scrap Value m.u.150025003300
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Note: The annual cash flow in such case is the annual income
or annual inflow amount , therefore the plan which has the
maximum annual cash flow is the best one, and that is clear in
the spreadsheet solution. The capitalized profit is the present
equivalent amount for the profit gained from each plan through
its life.
Solution
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Input
output
1
4
3
2
Perfo
rman
ce d
ue to
cont
inuo
us im
prov
emen
tImproveEvaluation Form Evaluation Form (EF)(EF)
EvaluatorEvaluatorss
Frequency of Frequency of filling the EFfilling the EF
Course EFCourse EF
Trainee EFTrainee EF
Project EFProject EF
Observer EFObserver EF
Self/Peer Self/Peer Assessment FormAssessment Form
Duration EFDuration EF
Seminar EFSeminar EF
TraineesTrainees
TrainerTrainer
ObserverObserver
CoordinatCoordinatoror
SupervisoSupervisorr
Course/Course/ModuleModule
ProjectProject
ProgramProgram
As RequiredAs Required
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Criteria for Criteria for trainees selectiontrainees selection in in
second training week (26/2 – second training week (26/2 – 3/3/2005)3/3/2005)
and certificate deliveryand certificate delivery1 – Attending the full module of first 1 – Attending the full module of first
training weektraining week
2 – Getting high score in Trainee EF2 – Getting high score in Trainee EF
3 – Submitting Trainer EF3 – Submitting Trainer EF
4 – Submitting two reports: 4 – Submitting two reports:
A- Module #1A- Module #1
B- Module #2B- Module #2
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