Chapter 13 Spreadsheets – Model Answers
1. What is a spreadsheet package?
A spreadsheet is a computer package that is used to automate the activities of a person using a pencil and calculator. A common use of a spreadsheet package is to automate a financial model. A business person can explore a financial model of the business to predict the effect of decisions he might make. For instance, the spreadsheet can be used to predict the result of investing in an advertising campaign.
2. What is the difference between relative address and absolute address?
Relative and absolute addresses are effectively the same until we decide to MOVE or COPY some cells to a new location. When we move a cell to a new location then formulas change as well as the location of the cell contents. For instance, suppose we have a formula =A3+A5 at location B7. What happens if we move the formula at B7 to B11. Note that we have moved the formula down 4 cells. The formula would become =A7+A9. This is an example of relative addressing. The default for your computer is relative addressing. However, in some instances we do not want to use relative addresses. We want to use absolute addresses. To make this happen in Excel we would enter the formula as =$A$3+$A$5. With absolute addressing we can be sure that the formula will not change no matter where we move or copy the cell.
3. What different type of information can go in a cell?
(i) labels (ii) formulae (iii) functions (iv) numbers
4. What is the difference between a formula and a function?
A formula contains cell addresses that are usually a part of a mathematical expression that uses one or more binary operators. For example =A7+A9 is a formula. A function, on the other hand, always has a key word followed by parameters in brackets. For instance =SUM(A3:A7) uses the SUM function to add up numbers in the range A3 to A7.
5. List 5 functions that you have used before?
(i) SUM (ii) COUNT (iii) MAX (iv) MIN (v) FORMATCURRENCY
6. How would you place a spreadsheet table into your word processing document?
There are several ways to do this. The quick and dirty method is to cut and paste. We can also use object linking and embedding. This second method will ensure that our word processing document will remain up-to-date when ever the spreadsheet changes. We can choose insert object from the Insert menu at the top of the word processing window.
7. How can a spreadsheet be used as a financial model?
A common use of a spreadsheet package is to automate a financial model. A business person can explore a financial model of the business to predict the effect of decisions he might make. For instance, the spreadsheet can be used to predict the result of investing in an advertising campaign. The amount of goods sold should increase after an advertising campaign. This will increase profit. The cost of the advertising needs to be subtracted from the profit to see how much nett profit has been made. We can change the amount of advertising and things like the profit margin for selling products to maximize money made by the business. All this can be done on the screen, using our financial model, without the need to actually spend any money.
