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Unformatted text preview: We are into compounding , as in figuring compound interest on a bank deposit. That means we have to use algebraic powers, as in squares and cubes. The Excel formula for squaring the number in cell A1 is =A1^2. (The caret is on the Shift-6 key.) To get started, put any single-digit number in the Years cell (C12) for the Worst Case. Then, the formula for Expected Revenue is =C6*((1+C8)^C12) . Think about what this formula is doing, and why it is correct. Then enter the formula for Expected Expenses. Finally, the formula for Total Profit is a simple difference, Revenue minus Expenses. Now, change the number of Years, trial and error, until you find the first time the company is in the black, expressed as number of years to one decimal place e.g., 2.5. Repeat for the other two cases. -------Check total: In the Expected Case, GoodGrow will break even in 2.7 years....
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- Spring '09