Exploring Office 2003 - Grauer and Barber 1Committed to Shaping the Next Generation of IT Experts.
Chapter 4: Spreadsheets in Decision Making: What If?
Robert Grauer and Maryann Barber
Exploring Microsoft Excel 2003
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Objectives
Use the PMT function to calculate the payment of a car loan or mortgage.
Use the FV function to determine the future value of a retirement account
Explain how the Goal Seek command facilitates the decision-making process
Use mixed references to vary two parameters in a table
Use the AVERAGE, MAX, MIN, and COUNT functions
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Objectives (continued)
Use the IF and VLOOKUP functions to implement decision making
Freeze, unfreeze, hide, and unhide, rows and columns in a worksheet
Use the AutoFilter command to display selected records in a list
Describe the options in the Page Setup command used with large worksheets
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Case Study: Vacation Time
In this case study, students are asked to complete a worksheet that was started by someone else. The worksheet contains information about employees. They need to use date arithmetic to calculate how long an employee has been working here, use the VLOOKUP and IF functions to make determinations on how much vacation time each employee is entitled to and if he or she has any time left. After using these functions, students create some simple statistics, using built-in statistical functions.
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Using Functions
Function – a predefined computational task Requires arguments
Values the function uses to calculate answers Returns a value
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The PMT Function
Calculates a periodic payment, such as a car or mortgage payment
Based on: Amount financed Interest rate Number of periods
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Using the PMT function
Interest rate divided by 12
Number of payments multiplied by 12
Amount financed expressed as a negative number
Amount financed, interest rate, and the term, are all isolated as assumptions. One or more assumptions can be changed
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The FV function
Returns the future value of a series of payments For example, contributions to your 401K or IRA
Based on: Number of periods Expected rate of return Amount invested each period
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Using the FV Function
Amount of contribution, rate of return, and years contributing are all expressed as assumptions
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Inserting a Function
Use the Insert Function command from the Insert menu
Use the list box to select the name of the function Functions are categorized
Let the Wizard help you enter the arguments Point to enter cell references Use the Collapse button to collapse the dialog box
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The Function WizardEnter arguments into text boxes
Collapse button shrinks dialog box if necessary
Value returned by the function (answer) is displayed
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The Goal Seek Command
Allows you to set an end result and vary the inputs (assumptions) to produce that result Only one input can be varied at a time
All other assumptions remain constant For example, set a desired monthly car payment
Vary the amount financed Interest rate and number of months remain the same
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Using the Goal Seek Command
Enter the cell containing the desired result
Enter the desired value
Enter the cell containing the desired result
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Hands-on Exercise 1
Title of Exercise: Basic Financial Functions Objective: To illustrate the PMT and FV
functions; to illustrate the Goal Seek command. Input file: None Output file: Basic Financial Functions
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Developing Proficiency
Use relative and absolute references correctly Use relative cell references if the value will change when a
cell is copied Use absolute references if the value remains constant
(typically assumptions) Mixed references
Use when either the row or the column will change Isolate your assumptions
Formulas in cells refer to the assumptions area, not to the actual values
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Using Mixed References
Mixed references used for number of payments, rate of return
Absolute reference used for amount of contribution
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Hands-on Exercise 2
Title of Exercise: Advanced Financial Functions
Objective: To use relative, absolute, and mixed references in conjunction with the PMT and FV functions; to practice various formatting commands. Input file: None Output file: Advanced Financial Functions
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Statistical Functions
MAX, MIN, and AVERAGE functions Return highest, lowest, and average values from
an argument list Argument list may include cell references, cell ranges,
values, functions, or formulas Cells that are empty or contain text are not included
COUNT and COUNTA functions COUNT returns number of cells containing
numeric entries or formulas that return a number COUNTA also includes cells with text
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Using Functions versus Formulas
In general, use functions instead of formulas Functions are adjusted as rows or columns are
deleted or added within the range referenced by the function
With formulas Adding a row adjusts the cell references in the formula,
but does not include the new row in the formula Deleting a row causes a #REF error message
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The IF Function
Enables decision making in a worksheet Requires three arguments:
A condition A value if the condition is true A value if the condition is false
Condition must be able to be evaluated as true or false Uses relational operators (=, <, etc.)
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Using the IF Function Incorrectly
Value_if_true entered as a conditional test. Function will return True or False
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Using the IF Function Correctly
Value_if_true entered as a value. Value_if_false entered as a cell reference
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The VLOOKUP function
Allows Excel to look up a value in a table and return a related value
Requires three arguments: the numeric value (or cell) to look up the range of the table the column number containing the value you want
to return
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Using the VLOOKUP Function
This argument tells the function where to look. Absolute references used for the table
Look in the second column of the table, NOT in column J
Look up the value found in cell I4, in this case, the semester average
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Working With Large Worksheets
Scrolling causes the screen to move horizontally or vertically as you change the active cell Drag the horizontal or vertical scroll bars Click above or below vertical scroll bars Click to the left or right of horizontal scroll bars
Freezing Panes allows row and column headings to remain visible while scrolling
Hiding rows and columns makes rows and columns invisible on the monitor or when printed
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Freezing Panes
As you scroll back up, rows 4-8 will become visible again
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Printing Large Worksheets
Page Preview command (View menu) lets you see where the page breaks are
Page Setup command (File menu) lets you change how the sheet prints Change from portrait (8 ½ x 11) to landscape (11
x 8 ½) Change margins Scale the worksheet to print on one sheet
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The AutoFilter Command
Allows you to display a selected set of rows within a worksheet Displays rows that meet selected criteria Other rows are hidden, not deleted
Select Filter then AutoFilter from the Data menu
Select criteria from the dropdown
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Using the AutoFilter CommandClick the dropdown on the Homework column, then select Poor as the criteria
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Hands-on Exercise 3
Title of Exercise: The Expanded Grade Book Objective: To develop the expanded grade
book; to use statistical (AVERAGE, MAX, and MIN) and logical (IF and VLOOKUP functions); to demonstrate scrolling and the Freeze Panes command Input file: Expanded Grade Book Output file: Expanded Grade Book Solution
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Summary
Financial functions (PMT and FV) Goal Seek enhances decision making Statistical functions (MAX, MIN, AVERAGE,
COUNT, and COUNTA) Decision making functions (IF, VLOOKUP,
and HLOOKUP) Isolate and clearly label initial assumptions
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Summary (continued)
Copy using fill handle Use scrolling & the Freeze Panes command
to work with large worksheets Page Setup controls how the worksheet
prints AutoFilter command displays only rows that
meet certain criteria
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End-of-chapter Exercises
Multiple Choice Practice Exercises
Exercise 1 – Calculating Your Retirement Exercise 2 – Alternate Grade Book Exercise 3 – Expanded Payroll Exercise 4 – Fuel Estimates Exercise 5 – The Roth IRA Exercise 6 – Celebrity Birthdays Exercise 7 – The Health Club Exercise 8 – File Formats and Folders
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End-of-Chapter Exercises (continued) Practice Exercises
Exercise 9 – Nested Ifs and Other Functions Exercise 10 – Election 2000
Mini Cases The Financial Consultant Fun with the If Statement The Lottery A Penny a Day The Rule of 72
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Questions?