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I A 2 B 4 Investment A 5 Investment B 5 Investment C 7 B 3 _0 _1 2 3 Investment A B _0
I A 2 B 4 Investment A 5 Investment B 5 Investment C 7 B 3 _0 _1 2 3 Investment A B _0 1 2 Investment A 3 Investment B 4 Investment C 5 6 Formulas 7 Growth Rate (Expected) Year 0 11% $3,000 6% $3,000 4% $3,000 Growth Rate (Expected) Year 0 11% $3,000 D Growth Rate (Expected) Year 0 11% $3,000 6% $3,000 4% $3,000 Year 1 "Take each value in column C and multiply it by its adjacent growth rate in column B (which is 1 plus the percentage expected growth)." ABSOLUTE CELL REFERENCES Year 1 #N/A E Year 1 Formulas #N/A #N/A #N/A #N/A #N/A #N/A Year 2 #N/A Year 2 F #N/A #N/A #N/A Year 3 #N/A H TNEEAITVE VLLE TNEI ETNLINVE 4 5 Formulas 6 7 "Start in column D, then move across allowing the column to change, and multiply the preceding value by its FIXED growth rate in cell $B$13 (which is 1 plus the percentage expected growth) to get the current valu 8 9 Year 3 G #N/A #N/A #N/A Year 4 #N/A Year 5 Year 4 FIXED COLUMN / RELATIVE ROW CELL REFERENCES #N/A #N/A #N/A #N/A Year 6 Year 5 #N/A #N/A #N/A #N/A Year 6 J #N/A #N/A #N/A Year 7 #N/A Year 7 K #N/A #N/A #N/A Year 8 #N/A Year 8 #N/A #N/A #N/A L 8 9 O "Start in column D, then move across, and multiply the preceding value by its growth rate in cell $B22 (which is 1 plus the percentage expected growth) to get the current value." 1 "By changing the growth rate cell from $B$22, etc. to $B22, the row of the growth rate is allowed to change yet remain in column B while filling down to the other two Investments." 2 -3 Year 9 #N/A Year 9 #N/A #N/A #N/A M Year 10 #N/A Year 10 #N/A #N/A #N/A N O P We can tell from this table that there are 8 orders for the MP3 album and that value is in cell C2. A C Order Quantity 1 2 8 3 Concert t-shirt 17 4 Large soft drink 11 A 1 2 3 4 B Item MP3 album A 1 2 3 4 Next, we would like to calculate the Total Cost for all MP3 orders. To do that we would multiply the Order Quantity by the Unit Cost; 8 * 11.99. That can be done in cell E2. B Item MP3 album Concert t-shirt Large soft drink B Item MP3 album C Order Quantity 8 17 11 Concert t-shirt Large soft drink D Unit Cost ($) 11.99 27.99 4.99 Finally, we can select cell E2, grab the drag handle, and then drag down to E4 to obtain the other two Total Cost values. This technique uses relative cell references, meaning the values can change as you drag downward. C Order Quantity 8 17 11 D Unit Cost ($) 11.99 27.99 4.99 E Total Cost ? ? ? D Unit Cost ($) 11.99 27.99 4.99 E Total Cost =C2*D2 ? ? E Total Cost =C2*D2 =C3*D3 =C4*D4 In the given spreadsheet, three investments are listed in rows 4-6. Column B contains the expected growth rate for each investment as a percentage. Calculate the expected value of Investment A in cell D4 by multiplying its value in Year O by the quantity (1 + Growth rate). Then drag cell D4 down to D6 to get the other two investment values after one year given different growth rates and place those values below: Investment A: $ (to the nearest dollar) (to the nearest dollar) (to the nearest dollar) Investment B: $ Investment C: $ Absolute Cell References By placing a dollar sign ($) in front of the row and/or column of a cell you can "lock down" either the row, column, or both so no change occurs when you drag to fill other cells. In row 13, we would like to calculate the value of Investment A over a period of ten years assuming the constant growth rate in cell B13. First, calculate the value in Year 1 (D13) using the same technique in Part A. If you try to drag D13 to the right to fill in the remaining years, you will get some very strange numbers! That is because the growth rate cell B13 is changing as you drag. However, you need that cell to say fixed in place for all the formulas as you drag to fill E13 through M13. The way to fix cell B13 in place is using an absolute cell reference. Instead of B13 in the formula change it to $B$13 and then drag to the right to fill Year 2 through Year 10. Enter those values below (to the nearest dollar). Do not use a dollar sign ($), just the value. $ Year 1 $ Year 2 $ Year 3 Fixed Column / Relative Row Cell References $ Year 4 $ Year 5 $ Year 6 $ Year 7 $ Year 8 $ Year 9 $ Year 10 Now you would like to track the value of all three investments over the same 10-year period in rows 22, 23, and 24. Start by creating a formula in D22 that is like the formula in D13. However, there is one change to make. If you try to drag D13 to the right to fill in the remaining years, you will get some very strange numbers! That is because the growth rate cell B13 is changing as you drag. However, you need that cell to say fixed in place for all the formulas as you drag to fill E13 through M13. The way to fix cell B13 in place is using an absolute cell reference. Instead of B13 in the formula change it to $B$13 and then drag to the right to fill Year 2 through Year 10. Enter those values below (to the nearest dollar). Do not use a dollar sign ($), just the value. Year 1 $ $ Year 2 Fixed Column / Relative Row Cell References Year 3 Investment C: $ Check My Work $ Year 4 $ Reset Problem Year 5 $ Year 6 $ Year 7 $ Year 8 $ Year 9 Now you would like to track the value of all three investments over the same 10-year period in rows 22, 23, and 24. Start by creating a formula in D22 that is like the formula in D13. However, there is one change to make. $ Knowing that you will want to drag the entire 10-year span in row 22 down to rows 23 and 24, the row reference in the (1 + growth rate) calculation must be able to change as you drag. That is done by removing the dollar sign ($) in front of the row number in the growth calculation. Make sure that is done in cell D22, then drag across to M22 to obtain the values for Investment A. Year 10 Finally, select all cells from D22 to M22, and then drag down to fill the next two rows. Now you have the values for Investment B and Investment C. Notice the format of the formulas in cells D22:M24. What is the value of each investment in year 10? Investment A: $ (to the nearest dollar) Investment B: $ (to the nearest dollar) (to the nearest dollar)
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To calculate the expected value of Investment A in cell D4 you need to multiply its value in Year 0 ...Get Instant Access to Expert-Tailored Solutions
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