Online Learning for Sports Management
Exercise 13
Create a Simple Financial Model
The purpose of this exercise is simply to demonstrate the power of using spreadsheets to provide immediate information for financial decision making.
Download and save the spreadsheet, and use it to answer the following questions:
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1
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How much would Widgets Corporation need to increase the price of Widgets in order to make a profit of $30,000? Assume you make no other changes other than increase price. |
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2
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If Widgets Corporation lowers the cost of Direct Materials by $2.00 per unit, how does this improve profitability? Assume you make no other changes other than Direct Materials. |
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3
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If Widgets Corporation increases Advertising expenditure by $15,000, how many more Widgets would have to be sold to break even, if price stays the same at $100 each? |
The spreadsheets incorporates a very important technique called "LINKING", an essential skill for all persons working with spreadsheets for budgeting. If you would like to know more about LINKING click here.
To solve the above questions, simple make guesses and find the answers by trial and error. It should not take you long.
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