Sales and Expense report

Number of
speakers

Speakers
cost

900

Sales
Number of paid
participants
Fixed costs
Speakers cost
Speakers Variable cost
Variable cost for each
participants
Profit

Calculation

42
10
10

700
300

15000
7000
3000
300
0

Roberto's Place - a chain of pizza delivery stores

No. of vehicles Mr Robert's wants to buy
6
cost of each vehicle
total cost of vehicle
Down payment
Total bank loan amount
rate of interest(annual)
period( in years)
yearly payment
monthly payment

20000
120,000
25,000
95,000
9%
4
-29,323.52
-2,364.08

Q. Change in yearly period from 4 years to 5 years

period( in years)
new yearly payment
new monthly payment

5
-24,423.78
-1,972.04

Answer to next question : From the above, it is evident that if

Mr. Roberto wants to keep his mothly payment below 2000 , he
should finance the loan for 5 years period
Ans: Difference in monthly payment

Total bank loan amount

rate of interest(annual)
period( in years)
say for 1st year period
interest

95,000
9%
4
1
-8,550.00

Total bank loan amount

rate of interest(annual)
period( in years)
say for 1st year period
interest

95,000
9%
5
1
-8,550.00

Input Table with different interest rate with associated Monthy payment
A. Considering loan period as 4 years
interest rate
monthly payment
9%
-2,364.08
8.75%
8.50%
8.25%

8%

which is well within his

bank limit of 125,000

Answer

Answer

-392.04
no. of year
1
2
3
4
principal

-20,773.52
Total interest

principal

-15,873.78

ssociated Monthy payment

B. Considering loan period as 5 years
interest rate
monthly payment
9%
-1,972.04
8.75%
8.50%
8.25%

8%

After visiting several dealerships, he determines that each vehi

borrow up to $125,000 from a local bank; the interest rate is abo
years, and he has $25,000 available for a down payment. Orga
approximate monthly pa

If Roberto finances his new pizza delivery vehicles for 5 years inst
wishes to keep his payment below $2000 a month, should he fi
difference in monthly payments? Also, what is the difference in

For 4 year loan period

Interest amount
-8,550.00

-22,294.09

principle amount
-20,773.52

Total yearly payment

no. of
year
-29,323.52
1
-29,323.52
2
-29,323.52
3
-29,323.52
4
5
Total interest

Answer : Difference in Total interest for 4 and 5 year

After speaking with a loan officer at the local bank, Roberto is told that the availabl
product's help feature, investigate how to build input tables. Next, build a one input
interest rates should increase in quarter percent increments. What recommendations

ermines that each vehicle will cost approximately $20,000. He knows that he can
the interest rate is about 9 percent; he will need to arrange financing for at least 4
r a down payment. Organize this information in a spreadsheet. What is Robertos
approximate monthly payment? (5 marks)

vehicles for 5 years instead of 4 years, what is the new monthly payment? If Roberto
00 a month, should he finance the loan for 5 years instead of 4 years? What is the
what is the difference in total interest between the two years? (1 + 2 + 2 marks)

For 5 year loan period

Interest amount
-8,550.00

principle amount
-15,873.78

Total yearly payment

-24,423.78
-24,423.78
-24,423.78
-24,423.78
-24,423.78

-27,118.92

l interest for 4 and 5 year period

4,824.83

oberto is told that the available interest rates vary between 8 and 9 percent. Using your spreadsheet
ables. Next, build a one input table, outlining the interest rates and associated monthly payments. Your
ents. What recommendations would you give Roberto? (5 marks)

Microsoft Excel 15.0 Answer Report

Worksheet: [ITM_Group6.xlsx]Q3
Report Created: 17-06-2016 14:22:32
Result: Solver found a solution. All Constraints and optimality conditions are satisfied.
Solver Engine
Engine: Simplex LP
Solution Time: 0.062 Seconds.
Iterations: 14 Subproblems: 0
Solver Options
Max Time Unlimited, Iterations Unlimited, Precision 0.000001, Use Automatic Scaling
Max Subproblems Unlimited, Max Integer Sols Unlimited, Integer Tolerance 1%, Assume NonNeg

Objective Cell (Min)

Cell
Name
$F$24 =

Original Value
1487

Final Value
55515

Variable Cells
Cell
Name
$B$16 DENVER L.A.
$C$16 DENVER ST. LOUIS
$D$16 DENVER BOSTON
$B$17 HOUSTON L.A.
$C$17 HOUSTON ST. LOUIS
$D$17 HOUSTON BOSTON
$B$18 ATLANTA L.A.
$C$18 ATLANTA ST. LOUIS
$D$18 ATLANTA BOSTON
$B$19 MIAMI L.A.
$C$19 MIAMI ST. LOUIS
$D$19 MIAMI BOSTON
$B$20 SEATTLE L.A.
$C$20 SEATTLE ST. LOUIS
$D$20 SEATTLE BOSTON
$B$21 DETROIT L.A.
$C$21 DETROIT ST. LOUIS
$D$21 DETROIT BOSTON

Original Value
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1

Final Value
Integer
150 Contin
0 Contin
0 Contin
0 Contin
225 Contin
0 Contin
0 Contin
100 Contin
0 Contin
0 Contin
25 Contin
225 Contin
120 Contin
0 Contin
0 Contin
0 Contin
0 Contin
150 Contin

Constraints
Cell
Name
$B$22 L.A.
$C$22 ST. LOUIS
$D$22 BOSTON
$E$16 DENVER
$E$17 HOUSTON
$E$18 ATLANTA

Cell Value
Formula
270 $B$22<=$B$24
350 $C$22<=$C$24
375 $D$22<=$D$24
150 $E$16=$G$16
225 $E$17=$G$17
100 $E$18=$G$18

Status
Not Binding
Binding
Not Binding
Binding
Binding
Binding

$E$19 MIAMI
$E$20 SEATTLE
$E$21 DETROIT

250 $E$19=$G$19
120 $E$20=$G$20
150 $E$21=$G$21

Binding
Binding
Binding

nditions are satisfied.

omatic Scaling
nce 1%, Assume NonNegative

Slack
130
0
125
0
0
0

0
0
0

DENVER
HOUSTON
ATLANTA
MIAMI
SEATTLE
DETROIT

DENVER
HOUSTON
ATLANTA
MIAMI
SEATTLE
DETROIT

L.A. ST. LOUIS BOSTON

$58
$47
$108
$87
$46
$100
$121
$30
$57
$149
$66
$83
$62
$115
$164
$128
$28
$38
400
350
500

L.A. ST. LOUIS BOSTON

1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
6
6
6
<=
<=
<=
400
350
500

150
225
100
250
120
150

3=
3=
3=
3=
3=
3=

150
225
100
250
120
150

1487