CHAPTER FOURCASE STUDY 1:Modeling the Front and Inputs Sheets

We will now apply the knowledge gained in Chapters 1 and 2 to build a financial model for the phone factory project.

4.1 STEP 1: SOME HIGH-LEVEL THINKING

We need to resist the temptation to go straight to our computer and start making calculations in Excel. Instead, let us try to draw a map of the model on paper to ensure that we have a good understanding of the requirements. But before we even do that, let us try to understand what we are being asked to do. Basically, we are planning to set up a business from scratch. The business requires some capital, say $C, to get started. Once it is up and running, the business will incur running costs, say $RC, but it will also generate some ...

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