Indian Institute of Management Kozhikode 

Business Computing 
Assignment 2 (submit on or before 10 September 2018) 

1. Use Sheet1.

2. You are planning to buy a new car. The cost of the car is $50,000. You have been offered two payment plans:
(i) A 10 percent discount on the sales price of the car, followed by 60 monthly payments financed at 9 percent
 per year. (ii) No discount on the sales price of the car, followed by 60 monthly payments financed at 2 percent
per year. If you believe your annual cost of capital is 9 percent, which payment plan is a better deal? Assume
all payments occur at the end of the month. Use Sheet2.
3. A balloon mortgage requires you to pay off part of a loan during a specified period and then make a lump sum
payment to pay off the remaining portion of the loan. Suppose you borrow $400,000 on a 20-year balloon
mortgage, and the interest rate is 0.5 percent per month. Your end-of-month payments during the first 20
years are required to pay off $300,000 of your loan, at which point, you have to pay off the remaining $100,000.
Determine your monthly payments for this loan. Use Sheet3.
4. A software development company is thinking of translating a software product into Swahili. Currently, 200,000
units of the product are sold per year at a price of $100 each. Unit variable cost is $20. The fixed cost of
translation is $5 million. Translating the product into Swahili will increase sales during each of the next three
years by some unknown percentage over the current level of 200,000 units. Show how the change in profit
resulting from the translation depends on the percentage increase in product sales. You can ignore the time
value of money and taxes in your calculations. Use sheet4.
5. You are managing a conference at your college. Your fixed costs are $15,000. You must pay the 10 speakers
$700 each and the college union $300 per conference participant for food and lodging costs. You are charging
each conference participant who is not also a speaker $900, which includes the conference fee and food and
lodging costs. How many paid registrants need to attend for you to break even? Use Sheet5.
6. You own a fast-food restaurant and have done some market research in an attempt to understand your
customers better. For a random sample of customers, you are given the income, gender, and number of days
per week that residents go out for fast food. Use this information to determine how gender and income
influence the frequency with which a person goes out to eat fast food. The data is in Sheet6.
7. Sheet7 contains the following information for selected homes:
 Square footage
 Price
 Number of bathrooms
 Number of bedrooms

Use this information to answer the following questions:

 What is the average price of all homes having a total number of bathrooms and bedrooms greater than or
equal to six?
 How many homes sell for more than $300,000 and have a total number of bedrooms and bathrooms less
than or equal to five?
 How many homes have at least three bathrooms, but the total number of bedrooms and bathrooms is less
than or equal to six?
 What is the highest price of a home having at most 3,000 square feet and a total number of bedrooms and
bathrooms less than or equal to six? (Hint: Use the DMAX function to solve this problem.)
8. Sheet8 has two tables which contain the unit sales, dollar revenues, and product sold for each transaction
during the month:
a. Create a consolidated worksheet that gives the total unit sales and dollar revenue for each product
by region.
b. Create a consolidated worksheet that gives the largest first-quarter transaction for each product by
region from the standpoint of revenue and units sold.