Essentials of Business Analytics 1st

Edition Camm Solutions Manual

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 Spreadsheet Models

Chapter 7
Spreadsheet Models

Solutions:

1. a.

b. Let q = production volume (quantity produced)

R = revenue per unit

FC = the fixed costs of production

MC = material cost per unit

LC = labor cost per unit

P(q) = total profit for producing (and selling) q units

P(q) = Rq − FC − ( MC )q − ( LC ) q

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c.

d. Profit of -$5,200 is earned from a production volume of 12,000.

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2. a.

Breakeven appears in the interval of 20,000 to 30,000 units.

b.

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3. a.

With a demand of 3,500, there will be a loss of $20,000.

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b.

c.

For demand of 3,500, the breakeven access price is $51.71.

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4.

a.

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b.

Breakeven is 74.752 Nonmembers (or 75 Nonmembers).

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5.

a.

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b.

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6. a.

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b.

c.

The access price of $325 maximizes profit.

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7. a. The screenshot below displays the annual calculations. The future value of Lindsay’s investments can
also be computed using the Excel function =FV(B6, 30, -B5); the negative sign for the annual investment
is required as the future value command assumes a stream of payments not deposits.

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b.

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8.

Part of the spreadsheet mode appears below.

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A portion of the data table appears below:

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9.

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10.

Error #1: The formula in cell C17 is:

=SUMPRODUCT(C8:G11,B22:F25)

but should be
=SUMPRODUCT(C8:F11,B22:F25)

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Error #2: The formula in cell G22 is:

=SUM(B22:E22)

but should be
=SUM(B22:F22)

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11.

a. A portion of the spreadsheet is shown below.

b. Solution shown in cells G14:H18

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12.

a. A portion of the spreadsheet is shown below.

b. See column I below.

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13. a.

b.

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14 .

a.

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b. The lower the stock price, the more beneficial the put options. The options are worth nothing at a stock
price of $26 or above. There is a benefit from the put options to the overall portfolio for stock prices of
$24 or lower.

15.

a.

b. Part of the Data Table is shown below. Max profit occurs at Camera A price of $270 and Camera
B price of $390

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16.

Key cell formulas:

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17.

To answer this question, use Goal Seek to find the additional payment that makes the given month balance
$0. The answers are shown below in J14:J16.

Part of the spreadsheet model is shown below:

Key formulas:

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18. A portion of the spreadsheet is shown below:

19. Floyd’s Bumpers total cost of the May shipments is $641,596.98. A portion of the spreadsheet is shown
below:

The table of DC assignments begins in cell Q5:

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The rows of the distance table are the customer zips and are located in I6:I1034. The distribution centers
are located in J4:N4.

The following functions are used for each column (and similarly for other rows):

B6: =VLOOKUP(A6,$Q$6:$R$1034,2)

C6: =MATCH(A6,$I$6:$I$1034,0)

D6: =MATCH(B6,$J$4:$N$4,0)

E6: =INDEX($J$6:$N$1034,C6,D6)

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F6: =($C$2+$G$2)*E6

20. A portion of the spreadsheet is shown below:

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We use goal seek to find the discount rate that results in an NPV of $25,995:

The result is 10.9%. So effectively the dealer is making 10.9% interest on the loan of $25,995.

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