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Advanced Financial Excel Exercise

The document outlines an advanced Excel financial modeling exercise for GreenTech Investments Ltd., focusing on analyzing investment plans, loan amortization, and various financial metrics. Key tasks include calculating total cash inflows, net cash flow, payback period, NPV, IRR, ROI, and conducting a break-even analysis, all while ensuring professional formatting and the use of Excel functions. Additionally, it emphasizes creating an amortization schedule, applying conditional formatting, and visualizing results through charts.

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zealdajunior4
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16 views1 page

Advanced Financial Excel Exercise

The document outlines an advanced Excel financial modeling exercise for GreenTech Investments Ltd., focusing on analyzing investment plans, loan amortization, and various financial metrics. Key tasks include calculating total cash inflows, net cash flow, payback period, NPV, IRR, ROI, and conducting a break-even analysis, all while ensuring professional formatting and the use of Excel functions. Additionally, it emphasizes creating an amortization schedule, applying conditional formatting, and visualizing results through charts.

Uploaded by

zealdajunior4
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

■ Advanced Excel Financial Modelling Exercise

You're a financial analyst working for GreenTech Investments Ltd.. Your task is to analyze a set
of financial data related to investment plans, loan amortization, net present value (NPV), internal
rate of return (IRR), depreciation, break-even analysis, and ROI. You’ll build an interactive and
well-formatted model that includes multiple calculations, formulas, and financial functions. Follow
the steps closely. Use the suggested formulas, and where not given, apply your analytical skills.
Format everything professionally (currency, percentages, conditional formatting, etc.). This will
challenge your finance and Excel mastery!

Project Initial Investment Year 1 Year 2 Year 3 Year 4 Year 5 Salvage Value
Solar Plant 50000 12000 15000 16000 17000 18000 5000
Wind Turbine 75000 18000 20000 22000 24000 25000 10000
Battery Storage 40000 10000 11000 11500 12000 12500 3000

1. Calculate Total Cash Inflows for Each Project


Use: =SUM(C2:G2) + H2. Format as currency.

2. Compute Net Cash Flow


Net Cash Flow = Total Cash Inflows - Initial Investment. Create a column for it.

3. Calculate Payback Period


Calculate the time it takes to recover the initial investment. Use cumulative cash flows.

4. Net Present Value (NPV)


Use Excel's NPV function: =NPV(discount_rate, Year1:Year5) + Salvage - Initial Investment. Use
10% as discount rate.

5. Internal Rate of Return (IRR)


Use: =IRR(B2:H2). Interpret the value.

6. Create Amortization Schedule (Separate Sheet)


Simulate a loan of $30,000 at 8% annual interest over 5 years. Use PMT, IPMT, PPMT functions.

7. ROI (Return on Investment)


ROI = Net Profit / Initial Investment. Assume Net Profit = Net Cash Flow - Maintenance Costs
($5000).

8. Apply Conditional Formatting


Highlight NPV > 0 in green and IRR > 10% in bold green font.

9. Break-Even Analysis
Assume each project has fixed cost $20,000 and unit price $1000. Find break-even units using
formula: Fixed Cost / (Unit Price - Variable Cost). Assume Variable Cost = $600.

10. Chart: NPV and IRR by Project


Create a clustered column chart comparing NPV and IRR for the three projects. Add data labels.

■ Tip: Format all financial numbers with two decimal places. Use named ranges for better
readability. Keep your sheets well-labeled and your formulas auditable. Try to automate steps using
named ranges or dynamic formulas where possible.

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