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MBA 6203 Students: You will use spreadsheet software (e.g. Excel) to complete Case 12-37 in the textbook, “Determining Terms of Automobile Leasesâ€. Use the template provided on Blackboard. The case requires that you establish a “base case†and then reevaluate with different inputs. Instead of adding more worksheets or copying the formulas, etc., you will use the SCENARIO MANAGER in Excel.

Follow these steps: 1. On the “Part a (Base Case)†worksheet, enter the required information in the green-shaded cells 2. The Lease Payment should be a calculation using the formula provided in the “HINT†in the textbook 3. Go to Data >> What-if-Analysis >> Scenario Manager 4. Click “Add†5.

Name this first scenario “Part a (Base Case)†6. In the “Changing Cells†space, select all of the green-shaded cells 7. Click “Ok†8. For the Base Case Scenario (Part a), DO NOT change any of the Scenario Values 9. Click “Add†10.

Name the next scenario referencing the requirement in the case (e.g. Part b or Requirement b) 11. In the “Changing Cells†space, select the cells that need to be changed for the respective requirement. For example, for Part b, you would select the down payment cell. 12.

Repeat Septs 9 – 11 as needed to create all required scenarios 13. Click “Summary†14. On the Scenario Summary pop-up, ensure that the Scenario Summary Report Type is selected. 15. Enter the cell references of the results that you want included in your summary report. (Excel will automatically enter cell references.

You should confirm that these are what you want reported, and make changes, if necessary. You are interested in what the new lease payments would be in the different scenarios, so those are the cells that should be included.) 16. Click “Ok†17. Excel will produce a Scenario Summary worksheet that includes a summary of the changes and new calculations for each different scenario. 18.

Save the workbook with the Scenario Summary worksheet included and submit via the link in Blackboard. Part a (Base Case) Selling Price Age 1 year 2 years 3 years 4 years 5 years Resale Price Down Payment HINT: The down payment reduces the present value (PV) when calculating the lease payment. Cost of Capital Monthly Cost of Capital 0.0% Lease Calculations 2yr lease 3yr lease 4yr lease 5yr lease Lease Term in Months Lease Payment &F

Paper for above instructions

Determining Terms of Automobile Leases using Excel Scenario Manager
Introduction
Automobile leasing has become a prevalent financing option for consumers due to its flexibility and lower effective payments compared to purchasing outright. Understanding the components of vehicle lease agreements, including the selling price, down payment, cost of capital, and lease term, is essential for financial decision-making. This assignment employs Excel’s Scenario Manager to analyze how various inputs affect the lease payment. This report elaborates on the methodology adopted, along with insights from the resulting calculations.
Establishing the Base Case
The Base Case scenario involves inputting specific values into the designated green-shaded cells in the "Part a (Base Case)" worksheet. The inputs are as follows (fictional units are used for the sake of demonstration):
- Selling Price: ,000
- Resale Price: ,000
- Down Payment: