BA Excel Exam 2

future value (FV) function 5 parts

rate, nper, pmt, pv, type

FV function 5 parts definition

• rate: The interest rate applied to an investment.
  

• nper: the amount of time an investment is being measured
  

• pmt: The value of the payments that are added to an account.
  • You must place a negative sign in front of values
  

• [pv] present value: when a one-time investment is made

  • must place a negative sign in front
    

• [type]: Used to define when payments are made to an account;

  • “1” (used for payments made at the beginning

  • the default value of “0” (used when payments are made at the end
    

cash flow NPV function

• show how much cash is used or accumulated
  

• In NPV function is usually the net income
  

goal of NPV function

Rate = interest rate

Value 1 = Initial investment (year 0)

• A negative sign must be used when entering values or cell locations for this argument.

[value(n)] = Each value entered into the function after the value1 argument

sensitivity analysis excel tool function

Determine an output value first

• Solver will show what values should be entered into input cell locations (multiple input values

data table (what if function)

show multiple results of a formula (row and column).

input = adr/initial

output = revenue

True False — After creating a Data Table, you can not change any of the values along the top row or left column. Changing these values could create an error in the table results.

False: Changing the top row or left column values will produce new results in the table grid.

Development Analysis def

A study of the historic and future Supply changes in a particular area

Profitability Analysis def

A study of total revenues, expenses and profitability for hotels in a particular area.

Market Forecast is…

a projection of future performance

market study def

An overview of the hotel industry in a particular area, such as a country, city or another geographic segment.

How is the group of hotels performing and what makes them unique in Market Study

Market = a metropolitan city in US in this project

• Submarket

specific industry segment

Class/Scale group of hotels: Luxury, Upper Upscale, Midscale or Economy

• type of hotel

• brand and location of hotel

Size and structure information def

property and room counts by various categories

Performance information include…

monthly and daily occupancy, ADR, RevPAR, Supply, Demand and Revenue (Trend report)

Pipeline data is…

past and future development information

Profit and Loss data include

Annual revenues, expenses and profits

Hotel Census data include

attribute information for properties

Demand Generator includes:

anything in your market that is responsible for selling room nights

Compiling a List of Demand Generators

Sort your list by estimated demand potential based upon feedback and rankings

correlation sizes

0.90 - 1.00 -Very high correlation - Very strong relationship

0.70 - 0.90 -High correlation - Substantial relationship

0.40 - 0.70 -Moderate correlation - Moderate relationship

0.20 - 0.40 -Low correlation - Weak relationship

0.00 - 0.20 -Slight correlation -Relationship small and random

correlation def

Correlation examines the strength of a connection between two characteristics belonging to the same individual, or event or equipment

concept of correlation

• does not include the proposition that one thing is the cause and the other the effect

• merely say that two things are systematically connected

CAGR def

Compound Annual Growth Rate (CAGR) - simple method is to use the long-term average.

• In Excel function, CAGR = RRI (Years,PV,FV)

RRI Formula

RRI (Years, Beginning Value, Ending Value)