###

Date 31-Dec-2005 31-Dec-2006 31-Dec-2007 31-Dec-2008 31-Dec-2009 31-Dec-2010 31-Dec-2011 31-Dec-2012 31-Dec-2013 31-Dec-2014
Period 0 1 2 3 4 5 6 7 8 9
ToC Name Doc Inv Cons Units Esc

I OPERATIONS
Power Purchasing Agreement
Capacity Payments
Plus: Fixed O&M Charge FOMC PPA CTH 1.9290 $/kW/Month 3.00% - 1.9869 2.0465 2.1079 2.1711 2.2362 2.3033 2.3724 2.4436 2.5169

chaskell:
I. Name in Column F labels the name used for
either a cell, row or column. Here, Cell I8 is chaskell:
chaskell:
named FOMC for Fixed O&M Charge. Naming a IX. Numbers that are in black
VIII. Cells that are broader and in light
cell, row or columns is the same as anchoring are coded.here the coding is
yellow are inputs or assumptions chaskell:
using F4 =FOMC*((1+esc)^period), or
X. The Period is the marker for each year.
=$I8$*((1+$K$8)^O3)
Notice it starts with 0 and then continues
chaskell: to 20. The period can be used for
II. Doc is for the Document from where the input is derived. chaskell: chaskell: escalation and discount coding
PPA is the Power Purchasing Agreement VII. Column L is an anchoring mechanism that XI. The date will be driven from
can be used for beginning balances of zero another page but here it is an
chaskell: input, notice that dates are end
III. Inv is Individual, or the party verifying the assumption or input of year

chaskell:
IV. Cons is Constant. The figure should come from the assumption page. In this chaskell:
case it is the monthly revenue charge from the PPA. Note the naming in Cell I8, XII. Additional Items
normally this name would also come from the assumption page 1) The worksheet is on "freeze" in Cell J5.
2) Columns A through D have separate formats
chaskell: 3) Columns F through K are smaller fonts at 8
V. Units are the units for the constant in the previous column (J), the constant will always be a 4) After the last column, AG, all other columns are hidden
number, usually coded in accounting format 5) The coding in Cell A1 will repeat the worksheet ID below
6) Cell E4 is a hyperlink back to the Table of Contents (ToC)
7) The page setup will repeat Columns A - K and Rows 1 - 3
chaskell:
8) Setup is landscape and two pages wide
VI. Esc is Escalation. This is the escalation factor, if any. This will also come from the assumption page
9) Data Grouping collapses rows and columns
 Date 31-Dec-2015 31-Dec-2016 31-Dec-2017 31-Dec-2018 31-Dec-2019 31-Dec-2020 31-Dec-2021 31-Dec-2022 31-Dec-2023 31-Dec-2024 31-Dec-2025
Period 10 11 12 13 14 15 16 17 18 19 20
ToC Name Doc Inv Cons Units Esc

OPERATIONS
Power Purchasing Agreement
Capacity Payments
Plus: Fixed O&M Charge FOMC PPA CTH 1.9290 $/kW/Month 3.00% 2.5924 2.6702 2.7503 2.8328 2.9178 3.0053 3.0955 3.1883 3.2840 3.3825 3.4840

chaskell:
I. Name in Column F labels the name used for
either a cell, row or column. Here, Cell I8 is
named FOMC for Fixed O&M Charge. Naming a
cell, row or columns is the same as anchoring
using F4

chaskell:
II. Doc is for the Document from where the input is derived.
PPA is the Power Purchasing Agreement

chaskell:
III. Inv is Individual, or the party verifying the assumption or input

chaskell:
IV. Cons is Constant. The figure should come from the assumption page. In this
case it is the monthly revenue charge from the PPA. Note the naming in Cell I8,
normally this name would also come from the assumption page

chaskell:
V. Units are the units for the constant in the previous column (J), the constant will always be a
number, usually coded in accounting format

chaskell:
VI. Esc is Escalation. This is the escalation factor, if any. This will also come from the assumption page
 ###

EXAMPLE 2_1
###

Assumptions
chaskell:
Cell Lock 100
Step 1: Go to Cell D6 and enter "=D4"
Step 2: Enter F4 once, result "=$D$4" then Enter
Cell Lock $F$4
Step 3: Hold Shift + Down Curser for two cells
Step 4: Enter Ctrl + D
Step 5: Hold Shift + Right Curser for two columns
Step 6: Enter Ctrl + R

Row Lock 100 200 100

chaskell:
Step 1: Go to Cell D17 and enter "=D13"
Step 2: Enter F4 twice, result "=D$13" then Enter
Row Lock F$4 Step 3: Hold Shift + Right Curser for two cells
Step 4: Enter Ctrl + R
Step 5: Hold Shift + Down Curser for two column
Step 6: Enter Ctrl + D

Column Lock A chaskell:

B Step 1: Go to Cell D28 and enter "=D24"
C Step 2: Enter F4 twice, result "=$D24" then Enter
Step 3: Hold Shift + Down Curser for two cells
Column Lock $F4 Step 4: Enter Ctrl + D
Step 5: Hold Shift + Right Curser for two column
Step 6: Enter Ctrl + R
 enter "=D4"
ult "=$D$4" then Enter
wn Curser for two cells

ht Curser for two columns

d enter "=D13"
sult "=D$13" then Enter
ht Curser for two cells

wn Curser for two columns

nd enter "=D24"
esult "=$D24" then Enter
wn Curser for two cells

ht Curser for two columns

###

Assumptions
Jump Interval 1

Series
1
2 Chip:
3 Sum Series by Coding SUM
4
5
Chip:
Average Series by Coding AVERAGE

Chip:
Find the Minimum of the Series by Coding MIN

Chip:
Find the Maximum of the Series by Coding MAX
###

Assumptions
Contractual Term, (in years) 5

Year 1 2 3 4 5 6
Contract

chaskell:
Code the exercise using an IF function so that the green cells in Row 7 show
contract is in an operations year; and, 0, if it is not in a contractual year.
 7 8 9 10

green cells in Row 7 show a Flag of 1, if the

t in a contractual year.
###

Assumptions
Contractual Term, (in years) 5
Escalation Factor 5.00%

Year 1 2 3 4 5 6
Contract 1 1 1 1 1 -

Escalation Factor

chaskell:
Calculate the escalation factor for each period using the Z = ((1 + Y) ^ A) t
try and use the F4 technique to make your coding easier. Also Hide all the
Format the cells with four (4) decimal points. Try to use the Ctrl + 1 tech
The steps for hiding are:
1) Highlight a cell in Column O
2) Ctrl + Space Bar
3) Shift + Ctrl + "Right Curser"
4) Ctrl + 0 (Zero)
 7 8 9 10
- - - -

ng the Z = ((1 + Y) ^ A) technique. Remember to

g easier. Also Hide all the columns after Column O.
y to use the Ctrl + 1 technique with the Tab
###

Assumptions
Contractual Term, (in years) 5
Escalation Factor 5.00%
Contract Value 100

Year 1 2 3 4 5 6
Contract 1 1 1 1 1 -

Escalation Factor 1.0500 1.1025 1.1576 1.2155 1.2763 1.3401

Contract Value

chaskell:
Step 1: Hide unused columns
Step 2: Code the contract value line with the contract line and the escalation
Step 3: Use the Ctrl + 1 and Tab technique, font should be accounting with
two decimal points

Contract Value (with IF function)

chaskell:
Step 1: Create an IF function that uses Contract (Row 9) as the logic
Step 2: Code so that if true, Contract Value times the appropriate Escalation
Step 3: Make sure to use the appropriate F4 techniques for ease of coding
NB - You could just multiple by Row 13: a * 1 = a; and, a * 0 = 0
 7 8 9 10
- - - -

1.4071 1.4775 1.5513 1.6289

act line and the escalation factor

should be accounting with no currency symbol and

Row 9) as the logic

the appropriate Escalation Factor, if false 0
niques for ease of coding
; and, a * 0 = 0
###

Assumptions
Contractual Term, (in years) 8
Escalation Factor 5.00%
Contract Value 100

Year 1 2 3 4 5 6
Contract 1 1 1 1 1 1

Escalation Factor 1.0500 1.1025 1.1576 1.2155 1.2763 1.3401

Contract Value 105.00 110.25 115.76 121.55 127.63 134.01

Transpose (Formulas) Transpose (Values)

1 1
chaskell: Use the Paste Special chaskell: U
2 Step 1: Highlight E13:N13 2
Step 1: High
3 Step 2: Tap Ctrl + C 3
Step 2: Go t
4 Step 3: Go to Cell C16 4
Step 3: Righ
5 Step 4: Alt + Edit 5 Step 4: Alt +
6 Step 5: Paste Special 6 Step 5: Repe
7 Step 6: Tap Alt + Formulas 7
8 Step 7: Tap Alt + Transpose 8
9 9
10 10
 7 8 9 10
1 1 - -

1.4071 1.4775 1.5513 1.6289

140.71 147.75 - -

chaskell: Use the Right Click

Step 1: Highlight E13:N13
Step 2: Go to Cell J16
Step 3: Right Click
Step 4: Alt + Paste Special
Step 5: Repeat 6 & 7 for Values
###

Assumptions
Annual Interest Rate, r
Payment Periods, m
Period Interest Rate, r / m
Years, n
Number of Periods, m * n
Principal, P
Annuity Payment, in GBP
5.0000% chaskell: Calculate a Payment Annuity, PMT
Step 1: Hide all Columns after O
2 Step 2: Calculate Period Interest Rate, E6 = E4 / E5
Rate Step 3: Calculate Number of Periods, E8 = E5 * E7
Step 4: Calculate the Annuity Payment in E10
4
Step 5: Calculate the Annuity Payment in Row 15, with the PM
Nper Step 6: Ctrl + 1 set font to accounting with two decimals
1,000 Pv
NB - Remember to use the F4 technique and the Shift + Ctrl
PMT

Period 1 2 3 4 5 6
PMT Flag - - - - - -

Annuity Payment
ment Annuity, PMT
fter O
terest Rate, E6 = E4 / E5
of Periods, E8 = E5 * E7
ity Payment in E10
ity Payment in Row 15, with the PMT Flag
o accounting with two decimals

F4 technique and the Shift + Ctrl + Curser.

7 8 9 10
- - - -
###

Assumptions Effective Interst Rate Example

Annual Interest Rate, r 5.0000% Annual Interest Rate, r
Payment Periods, m 2 Payment Periods, m
Period Interest Rate, r / m 2.5000% Rate Effective Interest Rate
Years, n 4 Years, n
Number of Periods, m * n 8 Nper Annual Pmt, w/ Effective Rate
Principal, P 1,000 Pv Annual Pmt, from E10
Annuity Payment, in GBP (139.47) PMT Differential

Period 1 2 3 4 5 6
PMT Flag 1 1 1 1 1 1

Annuity Payment (139.47) (139.47) (139.47) (139.47) (139.47) (139.47)

Year 1 2 3 4 5 6

Annual Debt Service (278.93) (278.93) (278.93) (278.93) - -

chaskell:
The coding for this particular is rather complex, use the Alt + T U T or the F2 key to review
the coding. You will also notice that the coding for Cell F19 is slightly different than the for C
E19, review the differences. One final note is that if you ask the assumptions to calculate
outputs greater the number of available fields, here it is 10 periods, you will recieve a #REF
error.
 5.0000%
2
5.0625%
4
(282.42)
(278.93)
(3.49)

7 8 9 10
1 1 - -

(139.47) (139.47) - -

7 8 9 10

- - - -

T U T or the F2 key to review

slightly different than the for Cell
he assumptions to calculate
iods, you will recieve a #REF!
###

Assumptions
Annual Interest Rate, r
Payment Periods, m
Period Interest Rate, r / m
Years, n
Number of Periods, m * n
Principal, P
Annuity Payment, in GBP
5.0000% chaskell:
2 Step 1: Go to Cell E10
Step 2: Alt + Tools
2.5000% Rate
Step 3: Goal Seek
4 Step 4: To value - (100.00)
8 Nper Step 5: By changing Cell - E9
Step 6: Enter OK
1,000 Pv Result is - 717
(139.47) PMT

Period 1 2 3 4 5 6
PMT Flag 1 1 1 1 1 1

Annuity Payment (139.47) (139.47) (139.47) (139.47) (139.47) (139.47)

 7 8 9 10
1 1 - -

(139.47) (139.47) - -
###

Assumptions
Annual Interest Rate, r 5.0000%
Payment Periods, m 2
Period Interest Rate, r / m 2.5000% Rate
Years, n 4
Number of Periods, m * n 8 Nper
Principal, P 717 Pv
Annuity Payment, in GBP (100.00) PMT

Period 1 2 3 4 5 6
PMT Flag 1 1 1 1 1 1

Annuity Payment (100.00) (100.00) (100.00) (100.00) (100.00) (100.00)

chaskell: Create a table

Step 1: Highlight an array H20:N28 Period Payment: Principal Amount versus In
Step 2: Alt + Data Period Interest Rate,
Step 3: Tables 4.00% 4.50%
Step 4: Row Input Cell is E4 500.00
Step 5: Column Input Cell is E9 600.00
Step 6: Enter
Principal, P

Step 7: Type =
700.00
Step 8: Type E10, or curser to E10 and click 800.00
Step 9: Enter 900.00
Step 10: The Table will appear 1,000.00
Step 11: Format using Ctrl + 1 1,100.00
1,200.00
 7 8 9 10
1 1 - -

(100.00) (100.00) - -

Principal Amount versus Interest Rates

Period Interest Rate, r / m
5.00% 5.50% 6.00% 6.50%
###

Assumptions B/V Ratio rd

COST OF EQUITY, re 30.00% 5.00%
Risk-free Rate, rf 5.00% 35.00% 5.60%
Market Return, rm 12.00% 40.00% 6.20%
Market Risk Premium, MRP 45.00% 6.80%
Target Equity to Total Value Ratio, S / V 50.00% 7.40%
Beta, ß 55.00% 8.00%
COST OF EQUITY, re 60.00% 8.60%
65.00% 9.20%
COST OF DEBT, rd 70.00% 9.80%
Target Debt to Total Value Ratio, B / V 60.00% 75.00% 10.40%
COST OF DEBT, rd 80.00% 11.00%
85.00% 11.60%
90.00% 12.20%

MARKET CAPITALIZATION Year 1 Year 2

Shares Outstanding 100,000 100,000
Share Price $7.00 $9.00
Market Capitalization
Market Value of Debt (B) $2,000,000 $1,500,000
Enterprise Value (V)
Equity/Value (S/V)
Debt/Value (B/V)
Corporate Tax Rate 42.00% 40.00%

WEIGHTED AVERAGE COST OF CAPITAL (WACC) Year 1 Year 2

Risk-free Rate, rf
Market Return, rm
Beta, ß
Cost of Equity, re
Market Value of Equity / Total Value, S / V
Cost of Debt, rd
Market Value of Debt / Total Value, B / V
Corporate Tax Rate, Tc
WACC
 Beta chaskell: WACC = (re x (S / V)) + ((rd x (B / V)) x (1 - Tc))
0.250 Step 1: Calculate MRP (rm - rf)
0.413 Step 2: Calculate Target S / V = (1 - (B / V))
0.575 Step 3: Calculate Vlookup (lookup value, F14; table array;
0.738 H4:J16, column, 3) for Beta
0.900 Step 4: CAPM - re = rf + (Beta x MRP)
1.063 Step 5: Repeat appropriate Vlookup for Cost of Debt
1.225 Step 6: Calculate Market Capitalization = Shares x Price
1.388 Step 7: Enterprise Value = Market Cap + MV of Debt
1.550 Step 8: Calculate S / V = Market Cap / Enterprise Value
1.713 Step 9: Calculate B / V = MV of Debt / Enterprise Value
1.875 Step 10: Calculate the WACC using the given informatio for
2.038 Years 1 - 3. You should be using the same basic Vlookup
2.200 function as were used in the assumption calculations in rows 4
- 14.
Year 3
100,000 NB - Lookups must be in ascending order, therefore you
$11.00 should use the debt for the lookup and equity should either be
1 - Debt, or using the same denominator
$1,000,000

38.00%

Year 3
###

Assumptions
COST OF EQUITY, re chaskell: Format the cell so that when the WACC is gr
Risk-free Rate, rf 5.00% the cell is red.
Step 1: Go to Cell F17
Market Return, rm 12.00%
Step 2: Alt → Format → Conditional Formatting
Market Risk Premium, MRP 7.00%
Target Equity to Total Value Ratio, S / V 40.00% Step 3: Set Condition 1 so that "Cell value is" then "gre
Beta, ß 1.225 then .10.
Step 4: Alt + format
COST OF EQUITY, re 13.58%
Step 5: Curser to Patterns and pick red
Step 6: "Enter"
COST OF DEBT, rd
Step 7: Practice Alt → Tools → Goal Seek, by choosing
Target Debt to Total Value Ratio, B / V 60.00%
drivers that drive the WACC and set the Goal Seek to a
COST OF DEBT, rd 8.60%
greater 10%.

Corporate Tax Rate, Tc 38.00%

WACC 8.6292%
e cell so that when the WACC is greater than 10%

7
at → Conditional Formatting
1 so that "Cell value is" then "greater than"

terns and pick red

→ Tools → Goal Seek, by choosing any assumption

WACC and set the Goal Seek to any figure than