# 2.8 Modelling Exercise

• Open a new Excel workbook (then use File/Save As to save it under a new name).
• In a worksheet of the workbook, build the model as shown in column B and C above (column E is for reference, showing the formulas used; you do not need to build that part), and then save the file (using File/Save). When building the model, we recommend the following process (though you can choose to use your own route if you wish):
• Enter the text and data in rows 2 to 6. Format the data and borders.
• Enter the text and formulas in rows 8 to 11. Format as shown.
• Once built, practice performing the tracing of precedents and dependents, as well as using Formulas/Show Formulas. Also check the impact of changing the values of some of the input assumptions.

Note: You will need to model in the following quiz and in the next chapter, so please retain it by saving the file!

Use this model to address questions such as:

• What is the effect on profit of changing the price (e.g. from 10 to 11)?
• What would the profit be in a specific case or scenario where several input values are all changed (simultaneously) from the base case (e.g. in a scenario where Price = 9.5, Volume Sold =780, Variable Cost Per Unit =1.30, Fixed Costs =1505?)
• What is the lowest value of volume sold (expressed as a positive integer) for which the profit is positive (where all other inputs are set at a specific set of values, such as their base case values)?
• For a particular cell containing calculations (such as any call in the range C8 through C11), which cells would be shown as precedents when Formulas/Trace Precedents is used?

### Now please take the quiz!!!

Quizzes
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