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MS Office Forum / Excel / Charting / May 2008

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Excel Sensitivity (What If) analysis

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jordanpcpre - 21 May 2008 15:11 GMT
The analysis below (chart #1) shows what the IRR is at a 6.75% Cap Rate and a
$4.60 Rental Rate. The IRR was derived from a long formula of inputs (note
Cap Rate and Rental Rate were both one of the inputs). I need to create a
sensitivity (what if) analysis table showing what happens to the IRR if the
Cap Rate and/or Rental Rate is increased (see chart #2). Any recommendations
on how I can do this?

#1) Cap Rate 6.750%
                 _________
Rental         |IRR
$4.60          |29.71%

#2) Cap Rate 6.750%    7.000%
                  _____________________________
Rental          |IRR           IRR
$4.60           |29.71%     25.14%
$4.70           |32.44%     27.86%
Del Cotter - 21 May 2008 18:22 GMT
>I need to create a sensitivity (what if) analysis table showing what
>happens to the IRR if the Cap Rate and/or Rental Rate is increased (see
>chart #2). Any recommendations on how I can do this?

>#2) Cap Rate 6.750%    7.000%
>                   _____________________________
>Rental          |IRR           IRR
>$4.60           |29.71%     25.14%
>$4.70           |32.44%     27.86%

Perhaps a Surface Chart? It should be "2D" rather than 3D; that is, it
should be a plan view looking down on the data. The trick to making such
a graph elegant and informative is choosing the coloring and formatting.

Alternatively, the benefits of a surface chart and more can be achieved
using the most versatile of Excel chart types, the scatter chart. This
is a similar problem to the recent thread "Need help graphing an
equation" where the equation turned out to be the equation of a surface,
not a line:

http://www.branta.demon.co.uk/excel/eqsurf.xls

Signature

Del Cotter
NB Personal replies to this post will send email to del@branta.demon.co.uk,
   which goes to a spam folder-- please send your email to del3 instead.

 
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