Week 2 – More Excel Basics

Question 1

What is NPV and what is the formula?

Answer 1

NPV converts future cash flow stream into today’s dollars.

Question 2

What is IRR and what is the formula?

Answer 2

Measures the effective rate of return for your cash flow stream

Question 3

What is Correlation?

Answer 3

The measure of how two variables are related

Question 4

What is Linear regression and what does it measure?

Answer 4

A statistical method that allows us to summarize and study relationships between two continuous (quantitative) variables

Question 5

What is Exponential regression?

Answer 5

• Nonlinear patterns can be made evident by generating a scatterplot.
• Exponential growth is a form on nonlinear behavior.

Question 6

What is Power regression and why do we use it?

Answer 6

Occur when:
- More efficient due to learning curve
- Time to produce product declines over time
Won’t be linear

Question 7

What are Time series?

Answer 7

Seasonality: when data experiences regular changes that occur every year 
Examples:  
Holiday sales in the retail industry 
Home sales during summer 
Gasoline sales during summer vacations