Question

As there are material limitations to using Excel and the annuity formulas, financial Modelers will often resort to the flexibility of a custom table instead.

A. True
B. False

Answer 1

It is true that due to material limitations of Excel and annuity formulas, financial modelers may opt for the use of custom tables to achieve greater flexibility and accuracy in their models.

Step-by-step explanation:

Regarding the use of Excel and annuity formulas in financial modeling, it is true that there are material limitations to using these tools. Due to these limitations, financial modelers often prefer the flexibility of creating a custom table to suit their specific needs. While Excel does come with built-in functions for annuities, such as the PMT and FV functions, these may not cover all scenarios or complexities in financial calculations. Therefore, modelers sometimes build custom tables to model more detailed scenarios, to incorporate specific business rules, or to work around Excel functions that may not perfectly fit the needs of the analysis.