CONTENTS
PREFACE = ⅷ
Chapter 1 MANAGEMENT DECISION AND THE SPREADSHEET = 1
1.1 The Nature of Management = 1
1.2 Decision Support System Applications = 4
1.3 The Process of Evaluation = 8
1.4 Origins and Properties of Spreadsheets = 9
1.5 Cells, Numbers, Labels and Screen Display = 10
1.6 Formulae = 13
1.7 Functions Available in Spreadsheets = 9
1.8 Saving and Retrieving Files = 16
1.9 Facilities for Preparing Tables and Graphs = 17
1.10 Maintaining Order in Spreadsheet Modelling = 19
Appendix : Lotus 1-2-3 Release 3.0 = 20
Chapter 2 SENSITIVITY ANALYSIS AND REGRESSION USING DATA COMMANDS = 23
2.1 Data Table 1 = 23
2.2 Data Table 2 = 25
2.3 Sensitivity Analysis in Investment Appraisal = 26
2.4 Goal Seeking or Backward Iteration = 28
2.5 Data Regress = 30
2.6 The Two-Variable Linear Model = 32
2.7 Multiple Regression = 36
2.8 Other Data Commands = 37
Appendix : A Template for Linear Regression = 38
Chapter 3 INVESTMENT APPRAISAL = 44
3.1 Characteristics of Investment = 44
3.2 Discounted Cash Flow = 45
3.3 DCF Methods of Appraisal = 49
3.4 Choice of Appraisal Method = 52
3.5 Special Cases with IRR = 55
3.6 Rent or Buy? = 58
3.7 Variations on the Basic Discounting Apporaches = 60
3.8 Traditional Methods of Appraisal = 62
3.9 Writing-Down Allowances and Taxation = 65
3.10 Sensitivity Analysis = 68
3.11 Advanced Topics = 71
3.12 Risk and Uncertainty in Investment Appraisal = 76
Appendix : A Note on Portfolio Theory = 80
Chapter 4 DEMAND ANALYSIS AND ESTIMATION = 85
4.1 Determinants of Demand = 85
4.2 Marketing Concepts = 87
4.3 Multivariate Demand Functions and Elasticity = 88
4.4 Elasticity and Logarithmic Functions = 91
4.5 Extensions to the Elasticity Concept = 96
4.6 Problems of Econometrics = 98
Appendix : Illustration of Autocorrelation and its Correction = 102
Chapter 5 DEMAND FORECASTING = 106
5.1 Prediction Using Statistical Methods = 106
5.2 Multiple Regression in Forecasting Using Minitab = 113
5.3 Moving Averages in Time-Series Analysis = 118
5.4 Error Measurement in Forecasting, and Exponential Smoothing = 122
5.5 External Forecasts and Indicators = 128
5.6 Impact of the Product Life Cycle = 129
Chapter 6 COST AND PRICE RELATIONSHIPS = 136
6.1 Cost-Volume-Profit Analysis = 136
6.2 CVP and Economic Theory = 140
6.3 Cost-Based Pricing Models = 146
6.4 Target Rate of Return (TRR) Pricing = 148
6.5 Modified Cost-Plus Procedure 1 : Processing Charge to Reflect Opportunity Cost = 151
6.6 Moeified Cost-Plus Procedure 2 : Marginal Cost and Elasticity = 156
6.7 A Pragmatic Approach to Pricing = 158
6.8 Value of Utility Pricing = 160
6.9 The Product Life Cycle = 163
6.10 Experience Effects = 164
Chapter 7 LINEAR PROGRAMMING = 170
7.1 Background and Applications = 170
7.2 The Product-Mix Problem = 171
7.3 The Graphical Method = 175
7.4 Sensitivity Analysis = 178
7.5 Spreadsheets in Linear Programming = 179
7.6 Data Matrix Commands in Linear Programming = 184
7.7 Media Selection = 187
7.8 Multi-Period Capital Rationing = 190
Chapter 8 ISSUES IN PUBLIC SECTOR ANALYSIS = 197
8.1 Cost-Benefit Analysis = 197
8.2 The Choice of Discount Rate = 201
8.3 Option Appraisal = 202
8.4 Indicators and Qualitative Factors in Benefit Assessment = 203
8.5 Note on the Delphi Method = 206
8.6 Analysis of Costs and Benefits = 207
8.7 Specialised Software Applications = 209
ANSWERS = 220
AUTHOR INDEX = 224
SUBJECT INDEX = 226
