BUSINESS MATHEMATICS

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STATISTICS

LECTURE 18Review Lecture 17

Solve two linear equations with two unknowns

DB EXAMPLES

• =DB(A2,A3,A4,1,7) Depreciation in first year, with only 7 months calculated (186,083.33)

• =DB(A2,A3,A4,2,7) Depreciation in second year (259,639.42)

• =DB(A2,A3,A4,3,7) Depreciation in third year (176,814.44)

• =DB(A2,A3,A4,4,7) Depreciation in fourth year (120,410.64)

• =DB(A2,A3,A4,5,7) Depreciation in fifth year (81,999.64)• =DB(A2,A3,A4,6,7) Depreciation in sixth year

(55,841.76) • =DB(A2,A3,A4,7,5) Depreciation in seventh year, with

only 5 months calculated (15,845.10)

EXCEL FUNCTIONS FINANCIAL ANALYSIS

PV   Returns the present value of an investment

NPV   Returns the net present value of an investment based on

a series of periodic cash flows and a discount rate

PV(rate,nper,pmt,fv,type)

Rate    interest rate per period Nper   total number of payment periods in an annuity

Pmt  payment made each period and cannot change over the life of the annuity

Fv   future value, or a cash balance you want to attain after the last payment is made

Type   number 0 or 1 and indicates when payments are due.

NPV

NPV(rate,value1,value2, ...)

Rate

   rate of discount over the length of one period

Value1, value2, ... 

  1 to 29 arguments representing the payments and income

EXCEL FUNCTIONS FINANCIAL ANALYSIS

XNPV   Returns the net present value for a schedule of cash flows

that is not necessarily periodic

XNPV

XNPV(rate,values,dates)

Rate

   discount rate to apply to the cash flows

Values

   series of cash flows that corresponds to a schedule of payments in dates

Dates 

  schedule of payment dates that corresponds to the cash flow payments

EXCEL FUNCTIONS FINANCIAL ANALYSIS

SLN   Returns the straight-line depreciation of an asset for one

periodSYD

   Returns the sum-of-years' digits depreciation of an asset for a specified period

EXCEL FUNCTIONS FINANCIAL ANALYSIS

VDB   Returns the depreciation of an asset for a specified or

partial period using a declining balance methodXIRR

   Returns the internal rate of return for a schedule of cash flows that is not necessarily periodic

LINEAR EQUATIONSSolve two linear equations with

two variables

Solve problems that require setting up linear equations with two variables

Perform linear Cost-Volume-Profit and break-even analysis employing:

The contribution margin approach

The algebraic approach of solving the cost and revenue functions

SOLVING LINEAR EQUATIONS

2x – 3y = – 6 x + y = 2Solve for y

2x – 3y = – 62x + 2y = 4

-5y = -10Y = 2

SOLVING LINEAR EQUATIONS

2x – 3y = – 6 x + y = 2Solve for x

Substitute y = 22x – 3(2) = – 62x - 6 = - 6

2x = 0x = 0

SOLVING LINEAR EQUATIONS

2x – 3y = – 6 x + y = 2Solve for x

Substitute y = 22x – 3(2) = – 62x - 6 = - 6

2x = 0x = 0

BUSINESS MATHEMATICS

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STATISTICS