Deck 11: Spreadsheet Modeling and Analysis

Question 1

Which of the following formulas would be used to calculate earnings before taxes?

A) =B15-B16+B6
B) =B15-B5
C) =B15-B16
D) =B17-B10

Answer 1

=B17-B10

Question 2

Use the table below to answer the following questions).
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug. The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to
$145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly
prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed. $$\begin{array} { | l | l | } \hline \text { Dresden Pharmaceuticals } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit monthly Rx) revenue \$) } & 420 \\\hline \text { Unit monthly Rx) cast \$) } & 150 \\\hline \text { Discount Rate per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D \$) } & 875,000,000 \\\hline \text { Clinical Trials \$) } & 145,000,000 \\\hline & \\\hline\end{array}$$

-Calculate cumulative net profit at the fourth year.

A) $1,073,538,462
B) $3,189,634,800
C) $1,312,041,240
D) $1,494,838,800

Answer 2

$3,189,634,800

Question 3

Use the table below to answer the following questions).
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug. The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to
$145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly
prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed. $$\begin{array} { | l | l | } \hline \text { Dresden Pharmaceuticals } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit monthly Rx) revenue \$) } & 420 \\\hline \text { Unit monthly Rx) cast \$) } & 150 \\\hline \text { Discount Rate per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D \$) } & 875,000,000 \\\hline \text { Clinical Trials \$) } & 145,000,000 \\\hline & \\\hline\end{array}$$

-Calculate the annual cost incurred for the second year.

A) $1,224,120,000
B) $884,520,000
C) $491,400,000
D) $638,820,000

Answer 3

$491,400,000

Question 4

Use the table below to answer the following questions).
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug. The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to
$145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly
prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed. $$\begin{array} { | l | l | } \hline \text { Dresden Pharmaceuticals } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit monthly Rx) revenue \$) } & 420 \\\hline \text { Unit monthly Rx) cast \$) } & 150 \\\hline \text { Discount Rate per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D \$) } & 875,000,000 \\\hline \text { Clinical Trials \$) } & 145,000,000 \\\hline & \\\hline\end{array}$$

-Calculate the market size for the second year.

A) 3,000,000
B) 273,000
C) 3,244,800
D) 3,120,000

Question 5

Which of the following formulas would be used to calculate the net income value using only the information in the Model, and not in the Data section?

A) =B5-B17
B) =B6-B15
C) =B15-B16-B17+B18
D) =B18-B11

Question 6

Use the table below to answer the following questions).
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug. The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to
$145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly
prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed. $$\begin{array} { | l | l | } \hline \text { Dresden Pharmaceuticals } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit monthly Rx) revenue \$) } & 420 \\\hline \text { Unit monthly Rx) cast \$) } & 150 \\\hline \text { Discount Rate per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D \$) } & 875,000,000 \\\hline \text { Clinical Trials \$) } & 145,000,000 \\\hline & \\\hline\end{array}$$

-Calculate the net present value for Dresden's new drug.

A) $1,312,041,240
B) $339,600,000)
C) $3,702,463,939
D) $932,028,690)

Question 7

Which of the following would be used to calculate the gross profit?

A) =SUMB7:B11)-B6
B) =B5-B6
C) =B5-B6-B11)
D) =B5-B6+B11-B10)

Question 8

Use the table below to answer the following questions).
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug. The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to
$145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly
prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed. $$\begin{array} { | l | l | } \hline \text { Dresden Pharmaceuticals } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit monthly Rx) revenue \$) } & 420 \\\hline \text { Unit monthly Rx) cast \$) } & 150 \\\hline \text { Discount Rate per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D \$) } & 875,000,000 \\\hline \text { Clinical Trials \$) } & 145,000,000 \\\hline & \\\hline\end{array}$$

-Calculate the projected profit for the third year.

A) $31,315,200
B) $2,373,996,000
C) $1,149,876,000
D) $1,494,838,800

Question 9

Use the table below to answer the following questions).
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug. The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to
$145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly
prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed. $$\begin{array} { | l | l | } \hline \text { Dresden Pharmaceuticals } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit monthly Rx) revenue \$) } & 420 \\\hline \text { Unit monthly Rx) cast \$) } & 150 \\\hline \text { Discount Rate per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D \$) } & 875,000,000 \\\hline \text { Clinical Trials \$) } & 145,000,000 \\\hline & \\\hline\end{array}$$

-Calculate the projected sales for the first year.

A) 273,000
B) 210,000
C) 378,000,000
D) 268,230

Question 10

Use the table below to answer the following questions).
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug. The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to
$145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly
prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed. $$\begin{array} { | l | l | } \hline \text { Dresden Pharmaceuticals } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit monthly Rx) revenue \$) } & 420 \\\hline \text { Unit monthly Rx) cast \$) } & 150 \\\hline \text { Discount Rate per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D \$) } & 875,000,000 \\\hline \text { Clinical Trials \$) } & 145,000,000 \\\hline & \\\hline\end{array}$$

-Calculate the annual revenue for the fourth year.

A) $ 2,325,304,800
B) $830,466,000
C) $1,494,838,800
D) $1,149,876,000

Question 11

Use the table below to answer the following questions).
Below is the profit model spreadsheet for the Lazarus Shoe Company producing their latest model of shoes for the month of January. $\begin{array}{|l|l|}\hline \begin{array}{l}\text { Profit Model for Lazarus } \\\text { Shoe Company for } \\\text { Tanuary }\end{array} & \text { All cost in } \$ \text { ) } \\\hline & \\\hline \text { Unit Price } & 47 \\\hline \text { Unit Cost } & 22 \\\hline \text { Fixed Cost for Production } & 350,000 \\\hline \text { Demand } & 40,000 \\\hline & \\\hline \text { Model } & \\\hline & \\\hline \text { Unit Price } & 47 \\\hline \text { Quantity Sold } & 38,000 \\\hline \text { Revenue } & \\\hline & \\\hline \text { Unit Cost } & 22 \\\hline \text { Quantity Produced } & 38,000 \\\hline \text { Variable Cost } & \\\hline \text { Fixed Cost } & 350,000 \\\hline & \\\hline \text { Profit } &\\\hline\end{array}$

-Calculate the revenue for units sold.

A) $836,000
B) $1,136,000
C) $600,000
D) $1,786,000

Question 12

Which of the following is necessary to calculate the variable cost of production for the company to develop a profit model?

A) unit sale price
B) quantity of item produced
C) quantity of item sold
D) fixed cost of production

Question 13

Troista Mobile Accessories sells mobile apps on their Web site. If a customer spends on average, $12 per visit and visits the Web site 20 times each year, what is the average nondiscounted gross profit during a customer's lifetime? Given that Troista makes a margin of 60 percent on the average bill, with 25 percent of customers not returning each year.

A) $30
B) $75
C) $360
D) $576

Question 14

Which of the following formulas would be used to calculate the operating expenses?

A) =SUMB7:B10)
B) =SUMB7:B9)
C) =SUMB7:B9)-B6
D) =SUMB7:10)-B11

Question 15

Use the table below to answer the following questions).
Below is the profit model spreadsheet for the Lazarus Shoe Company producing their latest model of shoes for the month of January. $\begin{array}{|l|l|}\hline \begin{array}{l}\text { Profit Model for Lazarus } \\\text { Shoe Company for } \\\text { Tanuary }\end{array} & \text { All cost in } \$ \text { ) } \\\hline & \\\hline \text { Unit Price } & 47 \\\hline \text { Unit Cost } & 22 \\\hline \text { Fixed Cost for Production } & 350,000 \\\hline \text { Demand } & 40,000 \\\hline & \\\hline \text { Model } & \\\hline & \\\hline \text { Unit Price } & 47 \\\hline \text { Quantity Sold } & 38,000 \\\hline \text { Revenue } & \\\hline & \\\hline \text { Unit Cost } & 22 \\\hline \text { Quantity Produced } & 38,000 \\\hline \text { Variable Cost } & \\\hline \text { Fixed Cost } & 350,000 \\\hline & \\\hline \text { Profit } &\\\hline\end{array}$

-Calculate the variable cost of production.

A) $1,786,000
B) $836,000
C) $600,000
D) $1,436,000

Question 16

Use the table below to answer the following questions).
Below is the profit model spreadsheet for the Lazarus Shoe Company producing their latest model of shoes for the month of January. $\begin{array}{|l|l|}\hline \begin{array}{l}\text { Profit Model for Lazarus } \\\text { Shoe Company for } \\\text { Tanuary }\end{array} & \text { All cost in } \$ \text { ) } \\\hline & \\\hline \text { Unit Price } & 47 \\\hline \text { Unit Cost } & 22 \\\hline \text { Fixed Cost for Production } & 350,000 \\\hline \text { Demand } & 40,000 \\\hline & \\\hline \text { Model } & \\\hline & \\\hline \text { Unit Price } & 47 \\\hline \text { Quantity Sold } & 38,000 \\\hline \text { Revenue } & \\\hline & \\\hline \text { Unit Cost } & 22 \\\hline \text { Quantity Produced } & 38,000 \\\hline \text { Variable Cost } & \\\hline \text { Fixed Cost } & 350,000 \\\hline & \\\hline \text { Profit } &\\\hline\end{array}$

-Calculate the total profit.

A) $600,000
B) $1,436,000
C) $836,000
D) $1,786,000

Question 17

Use the table below to answer the following questions).
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug. The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to
$145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly
prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed. $$\begin{array} { | l | l | } \hline \text { Dresden Pharmaceuticals } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit monthly Rx) revenue \$) } & 420 \\\hline \text { Unit monthly Rx) cast \$) } & 150 \\\hline \text { Discount Rate per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D \$) } & 875,000,000 \\\hline \text { Clinical Trials \$) } & 145,000,000 \\\hline & \\\hline\end{array}$$

-Calculate the market share percentage in the third year.

A) 25 percent
B) 4 percent
C) 11 percent
D) 7 percent

Question 18

Which of the following formulas would be used to calculate the net income value using only the data value?

A) =SUMB5:B10)-B11
B) =SUMB5:B11)
C) =B5-SUMB6:B11)
D) =B5-SUMB6:B10)+B11

Question 19

In which of the following ways does demand influence profit?

A) It predicts how many units will be sold.
B) It directly influences the fixed cost of production.
C) It helps in reducing the variable cost of production.
D) It reduces the unit cost of production.

Question 20

Which of the following formulas would be used to calculate the net operating income?

A) =B15-B5
B) =B15-B16
C) =SUMB6:B10)-B11
D) =B15-B16+B6

Question 21

Calculate the economic value of a loyal customer for a company given that the customer purchases, on an average, worth $43 per visit and comes three times a year. The company's gross profit margin is 35 per cent with a customer defection rate of 0.4.

Question 22

Use the table below to answer the following questions).
Sheila joined Simsin Tradings at the age of 36 with a starting salary of $75,000. She expects a salary increase of 5 percent every year. Her retirement plan requires her to pay 9 percent of her salary, while the company matches it at 32 percent. She expects an annual return of 7 percent on her retirement portfolio. Using a predictive model for Sheila's first five years, calculate the following, assuming that the salary increases at the same rate every year, and the return of interest does not change. $\begin{array} { |l|l| } \hline \text {Retir ement Plan Model for Sheila }\\\hline\\\hline \text { Data }\\\hline\\\hline \text { Retirement Contribution percent of salary) } & 9 \text { percent } \\\hline \text { Employer Match } & 32 \text { percent } \\\hline \text { Annual Salary Increase } & 5 \text { percent } \\\hline \text { Annual Return on Investment } & 7 \text { percent } \\\hline\end{array}$


-Calculate the employer contribution in Sheila's fourth year at Simsin.

A) $546.98
B) $703.26
C) $2,500.47
D) $2,160

Question 23

Use the table below to answer the following questions).
Sheila joined Simsin Tradings at the age of 36 with a starting salary of $75,000. She expects a salary increase of 5 percent every year. Her retirement plan requires her to pay 9 percent of her salary, while the company matches it at 32 percent. She expects an annual return of 7 percent on her retirement portfolio. Using a predictive model for Sheila's first five years, calculate the following, assuming that the salary increases at the same rate every year, and the return of interest does not change. $\begin{array} { |l|l| } \hline \text {Retir ement Plan Model for Sheila }\\\hline\\\hline \text { Data }\\\hline\\\hline \text { Retirement Contribution percent of salary) } & 9 \text { percent } \\\hline \text { Employer Match } & 32 \text { percent } \\\hline \text { Annual Salary Increase } & 5 \text { percent } \\\hline \text { Annual Return on Investment } & 7 \text { percent } \\\hline\end{array}$


-What will be Sheila's salary in her second year of work at Simsin?

A) $81,750
B) $82,688
C) $78,750
D) $ 75,000

Question 24

Use the table below to answer the following questions).
Sheila joined Simsin Tradings at the age of 36 with a starting salary of $75,000. She expects a salary increase of 5 percent every year. Her retirement plan requires her to pay 9 percent of her salary, while the company matches it at 32 percent. She expects an annual return of 7 percent on her retirement portfolio. Using a predictive model for Sheila's first five years, calculate the following, assuming that the salary increases at the same rate every year, and the return of interest does not change. $\begin{array} { |l|l| } \hline \text {Retir ement Plan Model for Sheila }\\\hline\\\hline \text { Data }\\\hline\\\hline \text { Retirement Contribution percent of salary) } & 9 \text { percent } \\\hline \text { Employer Match } & 32 \text { percent } \\\hline \text { Annual Salary Increase } & 5 \text { percent } \\\hline \text { Annual Return on Investment } & 7 \text { percent } \\\hline\end{array}$


-What's the total retirement balance when Sheila has reached the age of 40 while working with Simsin?

A) $108,374.54
B) $56,253.36
C) $53,627.87
D) $91,163

Question 25

Use the table below to answer the following questions).
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug. The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to
$145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly
prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed. $$\begin{array} { | l | l | } \hline \text { Dresden Pharmaceuticals } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit monthly Rx) revenue \$) } & 420 \\\hline \text { Unit monthly Rx) cast \$) } & 150 \\\hline \text { Discount Rate per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D \$) } & 875,000,000 \\\hline \text { Clinical Trials \$) } & 145,000,000 \\\hline & \\\hline\end{array}$$

-Which of the following years shows the first profit for Dresden's new drug?

A) first year
B) second year
C) third year
D) fourth year

Question 26

Use the table below to answer the following questions).
Below is a room overbooking model spreadsheet for the Metza, a hotel chain. The hotel has 425 rooms priced at $180 per day each, and is usually fully booked. Reservations can be cancelled any time before 5:00 p.m. with no penalty. The hotel estimates an average overbooking cost of
$150. Customer demand is set at 400 with an average cancellation of 20. $$\begin{array} { | c | c | c | } \hline & \text { A } & B \\\hline & \begin{array} { c } \text { Hotel Overbonking Model } \\\text { for the Metza group af } \\\text { hotels }\end{array} & \\\hline 1 & & \\\hline 2 & \text { Data } & \\\hline 3 & & \\\hline 4 & & \\\hline 5 & \text { Rooms Available } &425 \\\hline 6 & \text { Price per room } & \$ 180 \\\hline 7 & \text { overbonking Cost } & \$ 150\\\hline 8 & & \\\hline 9 & & \\\hline 10 & & \\\hline\end{array}$$ $$\begin{array} { | c | c | c | } \hline 11 & \text { Reservation Limit } & 425 \\\hline 12 & \text { Customer Demand } & 400 \\\hline 13 & \text { Reservation Made } & \\\hline 14 & \text { Cancellations } & 20 \\\hline 15 & \text { Customer Arrivals } & \\\hline 16 & \text { Overbonked Custarers } & \\\hline\end{array}$$

-Which of the following is the excel formula used to estimate overbooked customers?

A) =MIN0,B5-B15)
B) =MAX0,B15-B5)
C) =MAXB11,B12)
D) =MINB11-B12,B11-B14)

Question 27

Use the table below to answer the following questions).
In the spreadsheet below, there is data on the price, cost, demand, and quantity produced for an item. There are also different "what if" values that can help a manager to calculate costs and revenue with variability in demand. $$\begin{array} { | l | l | l | l | } \hline & \text { A } & \text { B } & \text { C } \\\hline 1 & \text { Profit Madel } & & \\\hline 2 & & & \\\hline 3 & & & \text { What } \text { if Demand } \\& \text { Data } & & \text { Values } \\\hline 4 & & & 20,000 \\\hline 5 & \text { Unit Price \$) } & 50 & 40,000 \\\hline 6 & \text { Unit Cost \$) } & 25 & 55,000 \\\hline 7 & \text { Fixed Cost \$) } & 550,000 & 60,000 \\\hline 8 & \text { Demand } & 60,000 & 65,000 \\\hline 9 & \text { Quantity Produced } & 55,000 & \\\hline 10 & & & \\\hline\end{array}$$

-From the "what if" values, calculate the total cost when demand is 40,000.

A) " 2,000,"00
B) $1,925,000
C) $1,100,000
D) $75,000

Question 28

Gruten Retailers sells Mother's Day special greeting cards at their store at $6. They make the cards for a dollar apiece. Most of the cards are sold by Mother's Day, but the actual demand is unknown. They have orders for 120 cards. In the past, they have had sales of at least 100 cards by Mother's Day. The remaining cards are sold at a 40 percent discount. Calculate the net profit, if demand, D, is set at 110 units.

Question 29

Use the table below to answer the following questions).
Below is a room overbooking model spreadsheet for the Metza, a hotel chain. The hotel has 425 rooms priced at $180 per day each, and is usually fully booked. Reservations can be cancelled any time before 5:00 p.m. with no penalty. The hotel estimates an average overbooking cost of
$150. Customer demand is set at 400 with an average cancellation of 20. $$\begin{array} { | c | c | c | } \hline & \text { A } & B \\\hline & \begin{array} { c } \text { Hotel Overbonking Model } \\\text { for the Metza group af } \\\text { hotels }\end{array} & \\\hline 1 & & \\\hline 2 & \text { Data } & \\\hline 3 & & \\\hline 4 & & \\\hline 5 & \text { Rooms Available } &425 \\\hline 6 & \text { Price per room } & \$ 180 \\\hline 7 & \text { overbonking Cost } & \$ 150\\\hline 8 & & \\\hline 9 & & \\\hline 10 & & \\\hline\end{array}$$ $$\begin{array} { | c | c | c | } \hline 11 & \text { Reservation Limit } & 425 \\\hline 12 & \text { Customer Demand } & 400 \\\hline 13 & \text { Reservation Made } & \\\hline 14 & \text { Cancellations } & 20 \\\hline 15 & \text { Customer Arrivals } & \\\hline 16 & \text { Overbonked Custarers } & \\\hline\end{array}$$

-Calculate the customer arrivals at the Metza.

A) 425
B) 405
C) 400
D) 380

Question 30

Use the table below to answer the following questions).
Sujito Electronix makes headphones for $22 and sells them for $32. Sujito has sold at least 50 headphones on average per week in the past, though the actual demand is unknown. Sujito has also often run short of supply in the past. After three months of release, the headphones are sold at 40 percent discount. The spreadsheet below shows Sujito's sales and demand for the headphones. We take demand at 51, and quantity produced at 55. $$\begin{array} { | l | l| } \hline \text { Newsvendor model for } & \\\text { Sujito's headphones } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { SellingPrice } & \$ 32\\\hline \text { Cost } &\$ 22 \\\hline \text { Discount Price } &\$ 19.2 \\\hline & \\\hline \text { Model } &\\\hline & \\\hline \text { Demand } & 51\\\hline \text { Produced Quantity } &55 \\\hline & \\\hline \text { Quantity Sold } & \\\hline \text { Surplus Quantity } & \\\hline\end{array}$$

-Calculate the net profit for the headphones.

A) $586.8
B) $498.8
C) $1653.8
D) $466.8

Question 31

Use the table below to answer the following questions).
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug. The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to
$145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly
prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed. $$\begin{array} { | l | l | } \hline \text { Dresden Pharmaceuticals } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit monthly Rx) revenue \$) } & 420 \\\hline \text { Unit monthly Rx) cast \$) } & 150 \\\hline \text { Discount Rate per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D \$) } & 875,000,000 \\\hline \text { Clinical Trials \$) } & 145,000,000 \\\hline & \\\hline\end{array}$$

-Which of the following conditions is the optimal solution to the newsvendor problem, where Q is the quantity to be purchased, and D is demand?

A) Q > D
B) Q = D
C) D > Q
D) Q / D = 0

Question 32

Use the table below to answer the following questions).
In the spreadsheet below, there is data on the price, cost, demand, and quantity produced for an item. There are also different "what if" values that can help a manager to calculate costs and revenue with variability in demand. $$\begin{array} { | l | l | l | l | } \hline & \text { A } & \text { B } & \text { C } \\\hline 1 & \text { Profit Madel } & & \\\hline 2 & & & \\\hline 3 & & & \text { What } \text { if Demand } \\& \text { Data } & & \text { Values } \\\hline 4 & & & 20,000 \\\hline 5 & \text { Unit Price \$) } & 50 & 40,000 \\\hline 6 & \text { Unit Cost \$) } & 25 & 55,000 \\\hline 7 & \text { Fixed Cost \$) } & 550,000 & 60,000 \\\hline 8 & \text { Demand } & 60,000 & 65,000 \\\hline 9 & \text { Quantity Produced } & 55,000 & \\\hline 10 & & & \\\hline\end{array}$$

-Calculate the variable cost when the demand is 60,000 units.

A) $1,430,000
B) $1,375,000
C) $2,750,000
D) $1,320,000

Question 33

Use the table below to answer the following questions).
In the spreadsheet below, there is data on the price, cost, demand, and quantity produced for an item. There are also different "what if" values that can help a manager to calculate costs and revenue with variability in demand. $$\begin{array} { | l | l | l | l | } \hline & \text { A } & \text { B } & \text { C } \\\hline 1 & \text { Profit Madel } & & \\\hline 2 & & & \\\hline 3 & & & \text { What } \text { if Demand } \\& \text { Data } & & \text { Values } \\\hline 4 & & & 20,000 \\\hline 5 & \text { Unit Price \$) } & 50 & 40,000 \\\hline 6 & \text { Unit Cost \$) } & 25 & 55,000 \\\hline 7 & \text { Fixed Cost \$) } & 550,000 & 60,000 \\\hline 8 & \text { Demand } & 60,000 & 65,000 \\\hline 9 & \text { Quantity Produced } & 55,000 & \\\hline 10 & & & \\\hline\end{array}$$

-Calculate the total revenue when the quantity produced is 55,000 and demand is 60,000.

A) $1,375,000
B) $1,320,000)
C) $1,430,000
D) $2,750,000

Question 34

Use the table below to answer the following questions).
In the spreadsheet below, there is data on the price, cost, demand, and quantity produced for an item. There are also different "what if" values that can help a manager to calculate costs and revenue with variability in demand. $$\begin{array} { | l | l | l | l | } \hline & \text { A } & \text { B } & \text { C } \\\hline 1 & \text { Profit Madel } & & \\\hline 2 & & & \\\hline 3 & & & \text { What } \text { if Demand } \\& \text { Data } & & \text { Values } \\\hline 4 & & & 20,000 \\\hline 5 & \text { Unit Price \$) } & 50 & 40,000 \\\hline 6 & \text { Unit Cost \$) } & 25 & 55,000 \\\hline 7 & \text { Fixed Cost \$) } & 550,000 & 60,000 \\\hline 8 & \text { Demand } & 60,000 & 65,000 \\\hline 9 & \text { Quantity Produced } & 55,000 & \\\hline 10 & & & \\\hline\end{array}$$

-From the "what if" values, calculate the total profit when the demand is 20,00".

A) $8"5,000
B) $1,000,000
C) $1,100,000
D) $925,000)

Question 35

Use the table below to answer the following questions).
Below is a room overbooking model spreadsheet for the Metza, a hotel chain. The hotel has 425 rooms priced at $180 per day each, and is usually fully booked. Reservations can be cancelled any time before 5:00 p.m. with no penalty. The hotel estimates an average overbooking cost of
$150. Customer demand is set at 400 with an average cancellation of 20. $$\begin{array} { | c | c | c | } \hline & \text { A } & B \\\hline & \begin{array} { c } \text { Hotel Overbonking Model } \\\text { for the Metza group af } \\\text { hotels }\end{array} & \\\hline 1 & & \\\hline 2 & \text { Data } & \\\hline 3 & & \\\hline 4 & & \\\hline 5 & \text { Rooms Available } &425 \\\hline 6 & \text { Price per room } & \$ 180 \\\hline 7 & \text { overbonking Cost } & \$ 150\\\hline 8 & & \\\hline 9 & & \\\hline 10 & & \\\hline\end{array}$$ $$\begin{array} { | c | c | c | } \hline 11 & \text { Reservation Limit } & 425 \\\hline 12 & \text { Customer Demand } & 400 \\\hline 13 & \text { Reservation Made } & \\\hline 14 & \text { Cancellations } & 20 \\\hline 15 & \text { Customer Arrivals } & \\\hline 16 & \text { Overbonked Custarers } & \\\hline\end{array}$$

-Calculate the net revenue.

A) $72,900
B) $76,500
C) $64,650
D) $68,400

Question 36

Use the table below to answer the following questions).
Sujito Electronix makes headphones for $22 and sells them for $32. Sujito has sold at least 50 headphones on average per week in the past, though the actual demand is unknown. Sujito has also often run short of supply in the past. After three months of release, the headphones are sold at 40 percent discount. The spreadsheet below shows Sujito's sales and demand for the headphones. We take demand at 51, and quantity produced at 55. $$\begin{array} { | l | l| } \hline \text { Newsvendor model for } & \\\text { Sujito's headphones } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { SellingPrice } & \$ 32\\\hline \text { Cost } &\$ 22 \\\hline \text { Discount Price } &\$ 19.2 \\\hline & \\\hline \text { Model } &\\\hline & \\\hline \text { Demand } & 51\\\hline \text { Produced Quantity } &55 \\\hline & \\\hline \text { Quantity Sold } & \\\hline \text { Surplus Quantity } & \\\hline\end{array}$$

-Which of the following is the value for quantity sold?

A) 51
B) 50
C) 4
D) 55

Question 37

Use the table below to answer the following questions).
In the spreadsheet below, there is data on the price, cost, demand, and quantity produced for an item. There are also different "what if" values that can help a manager to calculate costs and revenue with variability in demand. $$\begin{array} { | l | l | l | l | } \hline & \text { A } & \text { B } & \text { C } \\\hline 1 & \text { Profit Madel } & & \\\hline 2 & & & \\\hline 3 & & & \text { What } \text { if Demand } \\& \text { Data } & & \text { Values } \\\hline 4 & & & 20,000 \\\hline 5 & \text { Unit Price \$) } & 50 & 40,000 \\\hline 6 & \text { Unit Cost \$) } & 25 & 55,000 \\\hline 7 & \text { Fixed Cost \$) } & 550,000 & 60,000 \\\hline 8 & \text { Demand } & 60,000 & 65,000 \\\hline 9 & \text { Quantity Produced } & 55,000 & \\\hline 10 & & & \\\hline\end{array}$$

-From the "what if" values, calculate the revenue if the demand is 60,000 units.

A) $2,750,000
B) $825,000
C) $75,000
D) $1,375,000

Question 38

Use the table below to answer the following questions).
Sheila joined Simsin Tradings at the age of 36 with a starting salary of $75,000. She expects a salary increase of 5 percent every year. Her retirement plan requires her to pay 9 percent of her salary, while the company matches it at 32 percent. She expects an annual return of 7 percent on her retirement portfolio. Using a predictive model for Sheila's first five years, calculate the following, assuming that the salary increases at the same rate every year, and the return of interest does not change. $\begin{array} { |l|l| } \hline \text {Retir ement Plan Model for Sheila }\\\hline\\\hline \text { Data }\\\hline\\\hline \text { Retirement Contribution percent of salary) } & 9 \text { percent } \\\hline \text { Employer Match } & 32 \text { percent } \\\hline \text { Annual Salary Increase } & 5 \text { percent } \\\hline \text { Annual Return on Investment } & 7 \text { percent } \\\hline\end{array}$


-What will be the amount of employee contribution to retirement plan when Sheila has reached the age of 38?

A) $7,441.88
B) $7,813.97
C) $24,450
D) $2381.40

Question 39

Use the table below to answer the following questions).
In the spreadsheet below, there is data on the price, cost, demand, and quantity produced for an item. There are also different "what if" values that can help a manager to calculate costs and revenue with variability in demand. $$\begin{array} { | l | l | l | l | } \hline & \text { A } & \text { B } & \text { C } \\\hline 1 & \text { Profit Madel } & & \\\hline 2 & & & \\\hline 3 & & & \text { What } \text { if Demand } \\& \text { Data } & & \text { Values } \\\hline 4 & & & 20,000 \\\hline 5 & \text { Unit Price \$) } & 50 & 40,000 \\\hline 6 & \text { Unit Cost \$) } & 25 & 55,000 \\\hline 7 & \text { Fixed Cost \$) } & 550,000 & 60,000 \\\hline 8 & \text { Demand } & 60,000 & 65,000 \\\hline 9 & \text { Quantity Produced } & 55,000 & \\\hline 10 & & & \\\hline\end{array}$$

-From the "what if" values, calculate the net profit when the demand is 65,000.

A) $825,000
B) $1,650,000
C) $800,000
D) $925,000

Question 40

Use the table below to answer the following questions).
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug. The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to
$145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly
prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed. $$\begin{array} { | l | l | } \hline \text { Dresden Pharmaceuticals } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit monthly Rx) revenue \$) } & 420 \\\hline \text { Unit monthly Rx) cast \$) } & 150 \\\hline \text { Discount Rate per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D \$) } & 875,000,000 \\\hline \text { Clinical Trials \$) } & 145,000,000 \\\hline & \\\hline\end{array}$$

-Which of the following is the root cause for the newsvendor problem?

A) uncertainty in supply
B) uncertainty in demand
C) high cost per unit sale
D) high total production cost

Question 41

Brenton joined the Kroos Corporation at a starting salary of $61,500. According to the company's retirement plan, Brenton has to make a retirement contribution of 6 percent of his salary. The company contributes 30 percent of this amount. Brenton is expected to receive a salary increment of 3.5 percent per year for the next three years. Brenton is also expected to receive an annual investment return of 8 percent on the plan. Assuming the same rate of salary increases and investment returns each year, calculate the total balance of the retirement plan in its second year.

Question 42

Explain how the Data Validation feature in Excel helps in increasing spreadsheet quality.

Question 43

Profit is computed as the difference between total revenue from sales and total cost of production. Revenue depends on the market share captured by a company and the size of the target market. Various marketing decisions taken by managers are reflected upon the market share. The decisions also have an impact on marketing costs which in turn will affect the total cost of production. Construct an influence diagram that relates these variables.

Question 44

Which decision model incorporates the uncertainty element?

A) predictive
B) normative
C) prescriptive
D) descriptive

Question 45

Blue Sunset Band is planning to record a new album. A major decision to be made is if the band can record the album on their own, or if they should hire a studio to record it with. The fixed cost for recording at the studio is $100,000, plus the manufacturing cost per CD, which is at $5. If they record the album in-house, the cost per CD is $10. They plan to produce 3000 copies of the album regardless of the place of recording. If the band wished to break even with the cost, how can they achieve this by using the Goal Seek feature in Excel?

Question 46

Give an account of how data is used in predictive models.

Question 47

Give an account of how the design and format of spreadsheets can be improved.

Question 48

Which of the following formulas is used to calculate the total studio recording cost?

A) =SUMB6:B12)-B10
B) B6+B7-B16)B12
C) B6+B7*B12
D) B6+B7*B12-B16

Question 49

Which of the following formulas are used to calculate the In-house recording cost?

A) B10*B12
B) B10*B12-B17
C) B6+B10*B12
D) =SUMB6:B12)-B7

Question 50

Which of the following is the mathematical model for deriving total cost of only manufacturing?

A) TC = VC + C × Q)
B) TC = F + C × Q)
C) TC = F + C
D) TC = F + V × Q)

Question 51

The process of developing good, useful, and correct spreadsheet models is known as spreadsheet engineering.

Question 52

Discuss how overbooking decisions are made by service businesses.

Question 53

Which of the following formula is used to make the recording decision in B20?

A) =IFB19>0,"In-house","Studio")
B) =IFB19<=0,"Studio","In-house")
C) =SUMB19<=0,"Studio")
D) =IFB19>0,"Studio","In-house")

Question 54

Two-way data tables can evaluate only one output variable.

Question 55

To meet consumer demand, Nib 'N' Ink must produce 800 gel-ink refills. Should the company produce them in-house or outsource them from the supplier? Hint: Use the mathematical descriptive model).

Question 56

In predictive modeling, validity refers to how well a model represents reality.

Question 57

When will a company use a predictive decision model?

A) when it wishes to determine the best product pricing to maximize revenue
B) when it wishes to know how best to use advertising strategies to influence sales
C) when it wishes to know sales patterns to plan inventory levels
D) when it wishes to ensure that a specified level of customer service is achieved

Question 58

Find the range of volumes at which it is more economical for Nib 'N' Ink to produce the refills in-house or outsource them. Hint: Use the break-even decision model).

Question 59

Explain how a two-way data table is created.

Question 60

How can managers judge the validity of a model?