Compare break-even analysis and sensitivity analysis
Break-Even- is the type of what-if analysis that concentrates on activity at or around the point at which a product breaks even. Where profit is equal to $0. Sensitivity Analysis- is another type of what-if analysis that attempts to examine how sensitive the results of an analysis are to changes in the assumptions
How does a data table help you perform what-if analysis
Data Table- is a range of cells containing values and formulas.
Data tables allow you to organize and present the results of multiple what-if analyses
What is the difference between a one-variable data table and a two-variable data table? When would you use each type of table?
One Variable- has only one input cell and can have many result cells. Use a one-variable data table to see how different interest rates affect a loan payment. Two Variable- has two input cells, but only one result cell. Use a two variable data table to see how two factors affect a loan payment.
What are the two major steps involved in creating a data table in Excel
1.
Set up the structure for the data table. 2. Instruct Excel about how the data table's structure relates to the input section of the worksheet.
In a two-variable data table, what do the first column and first row of the table contain
The first row includes the output formula and the input values (selling price).
The first column includes all the units sold and the Output formula hidden behind a label.
When should you create a scenario instead of a data table? Give an example of a business situation that could best be analyzed with Scenarios
If you have multiple break-even analyses you would much rather use a scenario (a set of values stored in a worksheet that describes different situations). The scenario manager allows you to have different outcomes by placing possible numbers into specific cell fields.
Why are defined names important when you create scenarios
Defined names have a scope, which specifies the location in which the name is valid. It allows you to specify what cells you are working on when utilizing the scenario tool.
What type of reports can you create for scenarios? Which type shows results only?
Scenario Summary Reports & Scenario PivotTable Reports. Scenario Summary only shows the results of the data.
What type of what-if question can a simulation answer?
Allows the business to see the probability of each result. They are based on realistic, but not actual, data
Explain how you must vary the setup of a two-variable data table to run a simulation via the table.
When using a two-variable data table to run a simulation, one set of input values in the data table's structure must be a sequence of numbers that represents the number of iterations of the simulation.
