Excel Spreadsheet General Template for DCF and Simulation
This Template for DCF and Simulation refers to the Garage Case. Its worksheets go through all the basics needed to replicate that general kind of analysis. You can use it as a basic way to analyze all kinds of projects and situations. It provides the following capabilities:
* Discounted Cash Flow flow for a system or project assuming a Deterministic Forecast;
* DCF for the system or project when we recognize the relevant Uncertainty and Simulate the range of possibilities; and
* DCF when we embed one or more flexibilities that managers can exercise as events actually occur in the simulation.
The template also provides bar charts (histograms) and target curves representing the distribution of the system performance for the several cases.
To use the template you relabel the rows and columns to fit the situation you wish to analyze, You’re also free to add or subtract rows or columns.
You must, of course provide suitable inputs, such as costs, revenues, and input parameters. And you definitely need to define the demand function suitable to your situation. You particularly need to change the non-linear one implemented in the template, both as to shape and levels.
To embed flexibilities, you need to embed appropriate IF statements (a subject treated later in the course).
You may wish to review the technical note for the Garage Case before getting into the Excel file which follows.
