SQIT3013 – Group Assignment 3

Question 1

1. Ahmad would like to have $80,000 in 15 years. To accumulate this amount, he plans to deposit an equal sum in the bank each month, which will earn 7% interest annually. Every payment will be made at the end of each month.

a. How much is the monthly deposit that Ahmad need to bank in? b. If Ahmad decided to make a large lump-sum deposit today instead of the monthly

deposits, how large should this lump-sum deposit be? (Assume 7% interest earning) c. Prepare a two-way table for sensitivity analysis, showing each monthly deposit needed

for interest rates ranging from 5% to 8% with 0.5% increment, and also investment periods of 10 to 16 years.

i. What is the monthly deposit needed to achieve the target amount after 12 year if the interest rate is 7.5%?

ii. If Ahmad wish to add another $88 a month, how soon can Ahmad get $80,000 (in years) if the interest rate is 6%?

iii. If Ahmad has to deposit $306 a month for the next 14 years to get $80,000, how much is the interest rate (round up to 1 decimal place)?

2. The Mall Corporation is considering three mutually exclusive projects. The cash flows associated

with those projects are as follows:

Project A Project B Project C

Initial outlay -$1,000 -$10,000 -$5,000

Inflow year 1 600 5,000 1,000

Inflow year 2 300 3,000 2,000

Inflow year 3 200 3,000 2,000

Inflow year 4 100 3,000 2,000

Inflow year 5 500 3,000 2,000

The required rate of return on these projects is 10% and there is no capital constraint.

a. Calculate each project’s payback period. b. Calculate each project’s NPV. c. Calculate each project’s IRR. d. Calculate each project’s PI. e. Which project should be selected?

Question 2

1. Download the Adult dataset from

http://archive.ics.uci.edu/ml/machine-learning-databases/adult/adult.data

2. Import the data into Microsoft Excel format

3. The first column should be their respective attribute names as follows: Age, Workclass, Fnlwgt, EducationType, EducationYears, MaritalStatus, Occupations, Race, Sex, CapitaGain, CapitalLoss, Hoursperweek, NativeCountry, Class

4. Give the descriptive statistics (mean, median, standard deviation, range, minimum, maximum and sum) based on the Age and HourperWeek

5. By using the AutoFilter features, show:

a) EducationType ending with “rs” and Marital Status Bachelors b) Capital Gain > 1000 and Sex = Female

6. Use the Advanced Filter features, then create new table shows the Native Country involving description that started with C and the Class = <=50K. * please show the syntax for setting the criteria

7. Create a Pivot table showing the Average Age vs Class

8. Use the Pivot table to show that the Occupation types Exec managerial is Asian Pacific Islander

9. Filter the Pivot table in 4. by Race showing the average Capital Loss by each customer.

10. Prepare chart that shows the amount Capital Loss for each item