The file Calculate NPV.xlsx contains a model for calculating the net present value (NPV) from an investment. (See Figure 6.1.) Five inputs are listed in the range B4:B8. These are used to implement the calculations for cash inflows in row 12, and the NPV is then calculated with the formula =NPV(B8,B12:K12)-B4 in cell B14. All of the logic to this point is incorporated in the worksheet and does not need to be changed at all. When you enter different inputs in the B4:B8 range, the NPV in cell B14 automatically recalculates.

Rows 18–22 contain possible values of the inputs, where each row is sorted in increasing order. The values shown are for illustration only—you can change them if you like. The goal of the exercise is to ask the user for any two of the five inputs. Then the application should find the minimum and maximum values for these two inputs from the corresponding 18–22 rows, substitute each combination (minimum of first and minimum of second, minimum of first and maximum of second, maximum of first and minimum of second, and

maximum of first and maximum of second) in the appropriate cells in the B4:B8 range, and finally report the input values and corresponding NPVs in a table, starting in row 25. As an example, if the user selects inputs 3 and 5, the final result should appear as in Figure 6.2. Note that the values for the third input go from 2% to 12%, whereas the values for the fifth input go from 8% to 16%. Of course, these limits could change if the values in rows 18–22 are changed. The VBA should be written to respond correctly, regardless of the values in rows 18–22, assuming they are always listed in increasing order from left to right.

Figure 6.2 is taken from the file Calculate NPV Finished.xlsm. You can open this file and click the Run Sensitivity Analysis button to see in more detail how the application should work. (Don’t forget to enable the macros when you open the file.) However, try not to look at the code in this file until you have tried to develop the application on your own, starting with the file Calculate NPV.xlsx. (This example is obviously limited. Why only two of the five inputs? Why not three or more? For a more ambitious version, take a look at the file Calculate NPV Finished with Loops.xlsm.)