Below is an Excel model which forecasts yearly profit for an accounting practice

Question

Below is an Excel model which forecasts yearly profit for an accounting practice Smith & Chua, Chartered Accountants, based upon the following requirements: The model has to show forecast profit for the next 3 years (2011,2012,2013)
The yearly service revenue is $1,000,000 and is forecast to grow by 15% per year
The average salary is $100,000 and isn't expected to change over the next few years. However the company has a strong recruiting drive and expects to increase it's workforce by 20% per year. The company has a rule it only employs full time staff and the currently has 5 full time staff
Other expenses are $250,000 and aren't expected to change in the next 3 years
The model must be contained in cells A1:E24
What is the best formula in E16?

   A.ROUND(D16*(1+$B$5),0)
   B.ROUND (D16*(1+$B$5),2)
C. ROUND($D$16*(1+$B$5),0)
   D.ROUND ($D$16*(1+$B$5),2)

INPUT/ASSUMPTIONS 2 Service Revenue 1,000,000 3 Revenue Growth 4 Average Salary 5 Staff Growth 6 Staff numbers 7 15% $100,000 20% 10 11 Service Revenue 12 Revenue Growth 13 Average Salary 14 Staff Growth 15 16 Staff Numbers 17 Service Revenue 18 Expenses 19 20 21 22 Profit 23 REPORT 1,000,000 15% $100,000 20% 2011 2012 2013 1,000,000 $1,150,000 $1,322,500 $500,000 $600,000 $700,000 $250,000 $250,000 $250,000 Total $750,000 $850,000 $950,000 $250,000 $300,000 372,500 Salaries Other

Explanation / Answer

Answer is A

D16 = previous value , $B$5 = 20%

Round (n,d) if d = 0 then return nearest integer

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