122 Microsoft Offi ce Excel 2007: Data Analysis and Busi ness Modeling

hours than Maria, in cell D4 I've eOler.ed the formula TimcMaria_drives-2. In cells 06
and D7, we use the fact that distance=s,-:'eed ... time to compute the total distance Maria and
Edmund travel. The difference between the distances traveled by Edmund and Maria is
computed in cell 08 with the formula Maria_dislance-Edmund_dislance. Now I can fill in
the Goal Seek dialog box as shown in Figure 16-6.
Go . 1 s.",
W IOQI

l- 10'1
To v ..... :
10
1


[1'1\11
oc
1 1
c_"
1
Figure 16-6 The Goal Seek dialog box f illed in t o solve an algebra story problem
We change Maria's hours of driving (cd l 02) until the difference between the mil es trav-
eled by Edmund and Maria (cell 08) equals O. We find that after Maria drives 10 hours
and Edmund 8 hours, they will each have driven a distance of 640 miles.
Problems
1. From Problem 1 in Chapter 15, determine how many hardcover books must be sold to
break even.
2. From the car net present value (NPV) example in Chapter 14, Audi ting Tool,n by
what rate do annual sales need to grow for total NPV to equal $1 million?
3. What value of Year 1 unit cost would increase our NPV in the car example of Chapter 14
to $1 million?
4. In our mortgage example, suppose I need to borrow $200,000 for 15 years. If my maxi-
mum payments are limited to $2,000 per month, how high an annual interest rate can I
tolerate?
5. How could I use Goal Seek to determine a project' s internal rate of return (IRR)?
6. At the end of each of the next 40 years, I'm going to put $20,000 in my retirement fund.
What rate of return on my investments do I need so that I will have $2 million available
for retirement when I retire in 40 years?
7. I expect to earn 10 percent per year on my retirement investments. At the end of each of
the next 40 years, I want to put the same amount of money in my retirement portfolio.
How much money do I need to put in each year ifI want to have $2 million in my
account when I retire?