New Perspectives Excel 365/2021 | Module 9: SAM Project 1a

Mount Moreland Hospital

GETTING STARTED
 Save the file NP_EX365_2021_9a_FirstLastName_1.xlsx as
NP_EX365_2021_9a_FirstLastName_2.xlsx
o Edit the file name by changing “1” to “2”.

o If you do not see the .xlsx file extension, do not type it. The file extension
will be added for you automatically.
 With the file NP_EX365_2021_9a_FirstLastName_2.xlsx open, ensure that
your first and last name is displayed in cell B6 of the Documentation worksheet.
o If cell B6 does not display your name, delete the file and download a new
copy.

PROJECT STEPS
1. Pranjali Kashyap is a financial analyst at Mount Moreland Hospital in Baltimore,
Maryland. She is using an Excel workbook to analyze the financial data for a
proposed program called Neighborhood Nurse. The program involves nurses
and nurse practitioners providing healthcare services to Baltimore
neighborhoods from a van outfitted with medical equipment and supplies. She
asks for your help in correcting errors and making financial calculations in the
workbook.
Go to the Loan Payments worksheet. The hospital needs a loan to buy the
medical van for the Neighborhood Nurse program. Before Pranjali can calculate
the principal and interest payments on the loan, she asks you to correct the
errors in the worksheet. Correct the first error as follows:
a. In cell H17, use the Error Checking command to identify the error in the
cell.
b. Correct the error to total the values in the range C17:G17. In a later step,
you will calculate the interest and principal in the range C17:G18 to
remove the remaining errors.
2. Correct the #VALUE! errors in the worksheet as follows:
a. Use Trace Precedents arrows to find the source of the #VALUE! error in
cell C20.
b. Correct the formula in cell C20, which should divide the remaining
principal (cell C19) by the loan amount (cell D5) to find the percentage of
remaining principal.
c. Fill the range D20:G20 with the formula in cell C20 to correct the
remaining #VALUE! errors.
d. Remove any remaining trace arrows.
New Perspectives Excel 365/2021 | Module 9: SAM Project 1a

3. Now Pranjali is ready to calculate the annual principal and interest payments for
the medical van. Start by calculating the cumulative interest payments as
follows:
a. In cell C17, enter a formula using the CUMIPMT function to calculate the
cumulative interest paid on the loan for Year 1 (payment 1 in cell C15
through payment 12 in cell C16). Use 0 as the type argument in your
formula because payments are made at the end of the period.
b. Use absolute references for the rate, nper, and pv arguments, which are
listed in the range D5:D11.
c. Use relative references for the start and end arguments.
d. Fill the range D17:G17 with the formula in cell C17 to calculate the
interest paid in Years 2–5 and the total interest.
4. Calculate the cumulative principal payments as follows:
a. In cell C18, enter a formula using the CUMPRINC function to calculate the
cumulative principal paid for Year 1 (payment 1 in cell C15 through
payment 12 in cell C16). Use 0 as the type argument in your formula
because payments are made at the end of the period.
b. Use absolute references for the rate, nper, and pv arguments, which are
listed in the range D5:D11.
c. Use relative references for the start and end arguments.
d. Fill the range D18:G18 with the formula in cell C18 to calculate the
principal paid in Years 2–5 and the total principal.
5. Go to the Depreciation worksheet. Pranjali needs to correct the errors on this
worksheet before she can perform any depreciation calculations.
Correct the errors as follows:
a. Use Trace Dependents arrows to determine whether the #VALUE! error in
cell D12 is causing the other errors in the worksheet.
b. Use Trace Precedents arrows to find the source of the error in cell D12.
c. Correct the error so that the formula in cell D12 calculates the cumulative
straight-line depreciation of the medical van by adding the Cumulative
depreciation value in Year 1 to the Annual depreciation value in Year 2.
6. Pranjali wants to compare straight-line depreciation amounts with declining
balance depreciation amounts to determine which method is more favorable for
the hospital's balance sheet. In the range D5:D7, she estimates that the
Neighborhood Nurse program will have $234,000 in tangible assets at startup,
and that the useful life of these assets is seven years with a salvage value of
$37,440.
Start by calculating the straight-line depreciation amounts as follows:
a. In cell C11, enter a formula using the SLN function to calculate the
straight-line depreciation for the medical van during its first year of
operation.
b. Use absolute references for the cost, salvage, and life arguments in the
SLN formula.
c. Fill the range D11:I11 with the formula in cell C11 to calculate the annual
and cumulative straight-line depreciation in Years 2–7.
New Perspectives Excel 365/2021 | Module 9: SAM Project 1a

7. Calculate the declining balance depreciation amounts for the medical van as
follows:
a. In cell C18, enter a formula using the DB function to calculate the
declining balance depreciation for the medical van during its first year of
operation.
b. Use Year 1 (cell C17) as the current period.
c. Use absolute references only for the cost, salvage, and life arguments in
the DB formula.
d. Fill the range D18:I18 with the formula in cell C18 to calculate the annual
and cumulative declining balance depreciation in Years 2–7.
8. Pranjali also wants to determine the depreciation balance for the first year and
the last year of the useful life of the medical van.
Determine these amounts as follows:
a. In cell E22, enter a formula using the SYD function to calculate the
depreciation balance for the first year.
b. Use Year 1 (cell C17) as the current period.
c. In cell E23, enter a formula using the SYD function to calculate the
depreciation balance for the last year.
d. Use Year 7 (cell I17) as the current period.
9. Go to the Earnings Projections worksheet. Pranjali has entered most of the
income and expense data on the worksheet. She knows the income from
municipal grants will be $25,000 in 2025, and estimates it will be $40,000 in
2029. She needs to calculate the income from municipal grants in the years
2026–2028. The grants should increase at a constant amount from year to year.

Project the income from Municipal grants for 2026–2028 (cells D5:F5) using a
Linear Trend interpolation.
10. Pranjali also needs to calculate the income from insurance reimbursements in
the years 2026–2028. She knows the starting amount and has estimated the
amount in 2029. She thinks this income will increase by a constant percentage.
Project the income from Insurance reimbursements for 2026–2028(cells D7:F7)
using a Growth Trend interpolation.
11. Pranjali needs to calculate the payroll expenses in the years 2026–2029. She
knows the payroll will be $140,000 in 2025 and will increase by at least five
percent per year.
Project the payroll expenses as follows:
a. Project the expenses for Payroll for 2026-2029 (cells D13:G13) using a
Growth Trend extrapolation.
b. Use 1.05 (a 5 percent increase) as the step value.
12. The Projected Revenue line chart in the range H4:Q19 shows the revenue
Pranjali estimates in the years 2025–2029. She wants to extend the projection
into 2030.
Modify the Projected Revenue line chart as follows to forecast the future trend:
a. Add a Linear Trendline to the Projected Revenue line chart.
b. Format the trendline to forecast 1 period forward.
New Perspectives Excel 365/2021 | Module 9: SAM Project 1a

13. The Revenue Trend scatter chart in the range A21:G40 is based on monthly
revenue estimates listed on the Monthly Revenue Projections worksheet.
Pranjali wants to include a trendline for this chart that shows how revenues
increase quickly at first and then level off in later months.
Modify the Revenue Trend scatter chart as follows to include a logarithmic
trendline:
a. Add a Trendline to the Revenue Trend scatter chart.
b. Format the trendline to use the Logarithmic option.
14. Go to the Investment worksheet. This worksheet should show the returns
potential investors could realize if they invested $165,000 in the Neighborhood
Nurse program. Pranjali figures a desirable rate of return would be 7.3 percent.
She estimates the investment would pay different amounts each year (range
C7:C12) and wants to calculate the present value of the investment.
Calculate the present value of the investment as follows:
a. In cell C15, enter a formula that uses the NPV function to calculate the
present value of the investment in a medical van for the Neighborhood
Nurse program.
b. Use the desired rate of return value (cell C14) as the rate argument.
c. Use the payments in Years 1–6 (range C7:C12) as the returns paid to
investors. (Hint: If a Formula Omits Adjacent Cell error warning appears,
ignore it.)
15. Pranjali also wants to calculate the internal rate of return on the investment. If it
is 7 percent or higher, she is confident she can attract investors.
Calculate the internal rate of return on the investment as follows:
a. In cell C17, enter a formula that uses the IRR function to calculate the
internal rate of return for investing in a medical van for the Neighborhood
Nurse program.
b. Use the payments for startup and Years 1–6 (range C6:C12) as the
returns paid to investors.
Your workbook should look like the Final Figures on the following pages. Save your
changes, close the workbook, and then exit Excel. Follow the directions on the website to
submit your completed project.
New Perspectives Excel 365/2021 | Module 9: SAM Project 1a

Final Figure 1: Loan Payments Worksheet

Final Figure 2: Depreciation Worksheet

Final Figure 3: Earnings Projections Worksheet

Final Figure 4: Monthly Revenue Projections Worksheet

Final Figure 5: Investment Worksheet