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Chapter 2. Analyzing Data with Excel > Working with Scenarios

Working with Scenarios

In what-if analysis, a particular set of input values that you plug into a model is called a scenario. Because most what-if worksheets can take a wide range of input values, you usually end up with a large number of scenarios to examine. Instead of going through the tedious chore of inserting all these values into the appropriate cells, Excel has a Scenario Manager feature that can handle the process for you.

As you’ve seen in this chapter, Excel has powerful features that enable you to build sophisticated models that can answer complex questions. The problem, though, isn’t in answering questions, but in asking them. For example, Figure 2.7 shows a worksheet model that analyzes a mortgage. You use this model to decide how much of a down payment to make, how long the term should be, and whether to include an extra principal paydown every month. The Results section compares the monthly payment and total paid for the regular mortgage and for the mortgage with a paydown. It also shows the savings and reduced term that result from the paydown.


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