Requirements:This assignment is to be completed in groups and submitted via CloudDeakin as a MS Excel file and a MS PowerPointfile. The Excel file must be an original created by you for this assignment.Extensions must be negotiated at least one week prior to the above deadline by email. Requests for extensionsmade within 1 week of the deadline will only be considered if progressive work to date is submitted with therequest. Late submissions (for more than 5 days and without an agreed extension) will not be marked but will beconsidered in a pass/fail situation. 5% penalty is applied for every day or part day of late submission up to 5 days(without an agreed extension).Assignment Details:You are required to develop a spreadsheet-based decision model that can be used to investigate and exploredecisions and risks relating to taking a business loan (e.g. for investment) for a small-to-medium sized business. Themodel needs to be generic enough to enable the decision maker to explore the size of the loan that isviable/manageable within different scenarios of income, cost, expenses, loan amount, deposit made on the loan,repayment amount, other financial commitments, the amount of interest paid etc. and understand the risksassociated with meeting the loan commitments.The decision model must be realistic and easy to use. The level of complexity modelled, for example the choice ofdeterministic vs. stochastic inputs, input distributions, etc., is left to your discretion. However the model mustenable the user to input the following business cost/expenses and loan details/options.• Utilities (Electricity& Gas &Water)• Telephone/mobile• Insurance• Maintenance• Paid salaries• OtherNo data is provided. You are required to create a fictitious business and demonstrate the utility of the decision modelusing real data where available (e.g. interest rates) and create data where it is not (e.g. income, business expenses).Note that Net Profit = Sales revenue – Total variable costs – Fixed costs – Overheads.Deadline for submission: 8:00AM Monday 20 May 2019 (week 11).MIS775 DECISION MODELS FOR BUSINESS ANALYTICSTRIMESTER 1, 2019 Page 2The minimum requirements of the decision model are:1. Ability to enter loan details, income, costs and expenses to explore decision options relating to the loanamount and repayments to calculate outputs such as total interest paid and duration of loan.2. Ability to understand the impact of variation to the loan interest rate, income, cost and expensesover the duration of the loan.3. Stochastic treatment of some of the inputs to explore resulting simulated output and summarize risks.The PowerPoint presentation should form the content of a report that includes:1. A brief description of the model (maximum 100 words)2. A bubble diagram or similar capturing the conceptual model used and assumptions behind the decisionmodel (Optional: Using Analytica).3. The decision model copied from the spreadsheet.4. The best and worst case scenarios for the data you have used, and a discussion of the consequences.5. Summary report of the sensitivity analysis of inputs.6. Risk analysis report corresponding to the simulation modelling along with summary of inputparameters/distributions used.
