Spreadsheet Models for Managers

Getting Access to Spreadsheet Models for Managers

If Spreadsheet Models for Managersyou use Excel to model businesses, business processes, or business transactions, this course will change your life. You’ll learn how to create tools for yourself that will amaze even you. Unrestricted use of this material is available in two ways.

As a stand-alone Web site
It resides on your computer, and you can use it anywhere. No need for Internet access.
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Order "Spreadsheet Models for Managers, on-line edition, one month" by credit card, for USD 69.95 each, using our secure server, and receive download instructions by return email.
Order "Spreadsheet Models for Managers, on-line edition, three months" by credit card, for USD 199.00 each, using our secure server, and receive download instructions by return email.
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Make your check payable to Chaco Canyon Consulting, for the amount indicated:
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And send it to:
Chaco Canyon Consulting
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Cambridge, MA 02138

To use the course software you’ll need some other applications, which you very probably already have. By placing your order, you’re confirming that you have the software you need, as described on this site.

Spreadsheet Models for Managers

Payment calculation examples 9/14
Session Links
Example L
  • How much must you save each month in a savings account that pays 4% per year compounded monthly to reach a goal of $100 in 10 months?
  • What’s the future value of that payment stream?
  • What’s the present value of that future value?
  • How much would you have to pay each month to repay a loan of that amount if the interest rate is 4% per year, compounded monthly?

These examples are designed to show how payments, present value and future value are all interlocked. If you’re building models that use these concepts, you can use these relationships to verify that your models are correct.

The first question is a fairly simple application of the worksheet function PMT.

The second question is a verification, using FV, that the payment stream we just computed actually does produce $100, which is the future value we were trying to produce.

The third question tells us the present value of that future value.

The fourth question verifies that the payments required to pay off a loan equal to that present value are identical to the payments that produce the $100, which is the future value of that present value.

Last Modified: Wednesday, 27-Apr-2016 04:15:26 EDT

Nesting Worksheet Function Calls

Nesting invocations of worksheet functions can be a bit tricky, because nested function calls are difficult to think about. Sometimes, in developing a spreadsheet model, we can gain clarity by avoiding nesting. That is, while we’re still thinking about how to approach a modeling problem, we intentionally choose to avoid nesting function calls. After we understand the problem better — and only then — we might go back and replace what we’ve done with a more compact version that exploits nesting. In addition to producing forms that are easier to think about, this practice of developing a simpler form first has another benefit. It enables us to examine intermediate values more easily, which enables us to confirm that the calculations we’re performing make sense.

Some feel that building something that you intend to replace is a waste of effort — that it’s far easier to build things in final form from the start. When that approach works, it is faster and more efficient. But when we think we’re likely to make mistakes, the “slower” way is faster.

Do You Know What a Dynamic Model Is?

In years past, we’ve learned that what makes a model dynamic — as opposed to static — can be difficult to grasp. If you have some doubts yourself, and you haven’t yet looked at the reading on Models vs. Tools, we believe that you will find it helpful.