Prepare a scenario budget
A financial scenario is basically a mathematical problem in which
the objective is to calculate a financial outcome, usually profit,
from a given amount of information about probable income and costs.
The following activity provides an example of how to calculate
a financial scenario based upon given information. The scenario
is a chess tournament, and your tasks is to calculate the amount
of profit based on probable income and costs.
This activity is a typical example of the usefulness of spreadsheets
(such Microsoft Excel) for solving complex financial problems. This
problem is relatively easy in MS Excel.
The information you are given includes:
- The number of participants and the amount of income that
will be generated from fees paid by participants
- The profit from sales of merchandising
The costs involved in staging the event which include:
- Venue Costs
- Promotion and Administration
The answer to the problem is that the Chess Tournament
will yield a profit of $1,490 if everything goes