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Next Image: digitalart / FreeDigitalPhotos.net. Next Business is going well. So well that your boss wants to expand the current fleet. In order to purchase.

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Presentation on theme: "Next Image: digitalart / FreeDigitalPhotos.net. Next Business is going well. So well that your boss wants to expand the current fleet. In order to purchase."— Presentation transcript:

1 Next Image: digitalart / FreeDigitalPhotos.net

2 Next Business is going well. So well that your boss wants to expand the current fleet. In order to purchase a new tour boat, he proposes that the company raise the cost of each tour by $15!. You have been asked to look at the numbers again to determine the effects that a price increase would have on the company’s income. It is possible that any price increase may result in a drop in customers. Should the cost of each tour be raised by a flat amount, or by a certain percentage? Back Image: renjith krishnan / FreeDigitalPhotos.net

3 Next Revise the Monthly Sales spreadsheet by adding new columns to show the increase in profit when: the cost of each tour is increased by $15. the cost of each tour is increased by 10%. the number of customers for each tour decreases by 5%. Back

4 Next Before you proceed, see if you remember what formula to use. When entered into cell E2, which of the following formulas will correctly calculate the income when the unit cost of each cookie type is increased by $0.50 and the number of bags sold is reduced by four each? Click on the blue box next to your selection. Back =(B2-4)(C2+0.50) =(B2-4)*(C2+0.50) =(19)*(3.50) =B2-4*C Incorrect. Excel requires the * symbol to denote multiplication. Correct. This formula will perform the necessary changes, and can be used for other cells in this column. Partly correct. This formula will only calculate the changes for the chocolate chip cookies, not for all the groups. Incorrect. Parentheses are needed in order to follow the proper order of operations.

5 Next Step 1: Click on the spreadsheet at right. In column F, calculate the increase in profit when the cost of each tour is increased by $15, and the number of customers of each tour is reduced by 5%. Step 2: In cell F10, calculate the total income for the column. Step 3: Create a title for the column, and use a green font color for the column. Step 4: In cell F11, calculate the increase in total income. Bold this entry. Back Click here when done

6 Next Step 1: Click on the spreadsheet at right. In column G, calculate the increase in profit when the cost of each tour is increased by 10%, and the number of customers of each tour is reduced by 5%. Step 2: In cell G10, calculate the total income for the column. Step 3: Create a title for the column, and use an orange font color for the column. Step 4: In cell G11, calculate the increase in total income. Bold this entry. Back Click here when done

7 End Congratulations! Now show your boss the potential profits from two different price increases. You may be asked to investigate other possible scenarios that will affect the company’s income, but you will be prepared to do so through your Excel worksheet. Back Image: sheelamohan / FreeDigitalPhotos.net


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