SAS/ETS 9.22 User''''s Guide 308 ppt

3064 F Chapter 53: DetailsFigure 53.1 Saving to a Dataset The following items are displayed: Dataset Name holds the SAS data set name to which you want to save.. If the SAS data set name

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Contents

Investments and Data Sets 3063

Saving Output to SAS Data Sets 3063

Loading a SAS Data Set into a List 3065

Saving Data from a List to a SAS Data Set 3065

Right Mouse Button Options 3066

Depreciation Methods 3067

Straight Line (SL) 3067

Sum-of-Years Digits 3067

Declining Balance (DB) 3069

Rate Information 3070

The Tools Menu 3070

Dialog Box Guide 3071

Minimum Attractive Rate of Return (MARR) 3071

Income Tax Specification 3072

Inflation Specification 3073

Reference 3074

Investments and Data Sets

Investment Analysis provides tools to assist you in moving data between SAS data sets and lists you can use within Investment Analysis

Saving Output to SAS Data Sets

Many investment specifications have a button that reads Save Data As Clicking that button opens the Save Output Dataset dialog box (seeFigure 53.1) This dialog box enables you to save all or part

of the area generated by the specification

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Figure 53.1 Saving to a Dataset

The following items are displayed:

Dataset Name holds the SAS data set name to which you want to save

Browse opens the standard SAS Open dialog box, which enables you to select an existing SAS data set to overwrite

Dataset Label holds the SAS data set’s label

Dataset Variables organizes variables The variables listed in the Selected area will be included in the SAS data set

 You can select variables one at a time, by clicking the single right-arrow after each selection to move it to the Selected area

 If the desired SAS data set has many variables you want to save, it may be simpler to follow these steps:

1 Click the double right-arrow to select all available variables

2 Remove any unwanted variable by selecting it from the Selected area and clicking the single left-arrow

 The double left-arrow removes all selected variables from the proposed SAS data set

 The up and down arrows below the Available and Selected boxes enable you to scroll up and down the list of variables in their respective boxes

Save Dataset attempts to save the SAS data set If the SAS data set name exists, you are asked if you want to replace the existing SAS data set, append to the existing SAS data set, or cancel the current save attempt You then return to this dialog box ready to create another SAS data set to save

Return takes you back to the specification dialog box.

Loading a SAS Data Set into a List

Right-click in the area that you want to load the list and release on Load This opens the Load Dataset dialog box (seeFigure 53.2)

Figure 53.2 Load Dataset Dialog Box

The following items are displayed:

Dataset Name holds the name of the SAS data set that you want to load

Browse opens the standard SAS Open dialog box, which aids in finding a SAS data set to load If there is a Date variable in the SAS data set, Investment Analysis loads it into the list If there is

no Date variable, it loads the first available time-formatted variable If an amount or rate variable

is needed, Investment Analysis searches the SAS data set for a Amount or Rate variable to use Otherwise it takes the first numeric variable that is not used by the Date variable

Dataset Label holds a SAS data set label

OK attempts to load the SAS data set specified in Dataset Name If the specified SAS data set exists, clicking OK returns you to the calling dialog box with the selected SAS data set filling the list If the specified SAS data set does not exist and you click OK, you receive an error message and

no SAS data set is loaded

Cancel returns you to the calling dialog box without loading a SAS data set

Saving Data from a List to a SAS Data Set

Right-click in the area you want to hold the list, and release on Save This opens the Save Dataset dialog box

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Figure 53.3 Save Dataset Dialog Box

The following items are displayed:

Dataset Name holds the SAS data set name to which you want to save

Browse opens the standard SAS Save As dialog box, which enables you to find an existing SAS data set to overwrite

Dataset Label holds a user-defined description to be saved as the label of the SAS data set

OK saves the current data to the SAS data set specified in Dataset Name If the specified SAS data set does not already exist, clicking OK saves the SAS data set and returns you to the calling dialog box If the specified SAS data set does already exist, clicking OK warns you and enables you to replace the old SAS data set with the new SAS data set or cancel the save attempt

Cancel aborts the save process Clicking Cancel returns you to the calling dialog box without attempting to save

Right Mouse Button Options

A pop-up menu often appears when you right-click within table editors The menus offer tools to aid

in the management of the table’s entries Most table editors provide the following options

Figure 53.4 Right-Clicking Options

Add creates a blank row

Delete removes any currently selected row.

Copy duplicates the currently selected row

Sort arranges the rows in chronological order according to the date variable

Clear empties the table of all rows

Save opens theSave Datasetdialog box where you can save the all rows to a SAS Dataset for later use

Load opens theLoad Datasetdialog box where you select a SAS Dataset to fill the rows

If you want to perform one of these actions on a collection of rows, you must select a collection of rows before right-clicking To select an adjacent list of rows, do the following: click the first pair, hold down SHIFT, and click the final pair After the list of rows is selected, you may release the SHIFT key

Depreciation Methods

Suppose an asset’s price is $20,000 and it has a salvage value of $5,000 in five years The following sections describe various methods to quantify the depreciation

Straight Line (SL)

This method assumes a constant depreciation value per year

Assuming that the price of a depreciating asset is P and its salvage value after N years is S , the annual depreciation is:

N

For our example, the annual depreciation would be

$20; 000 $5; 000

Sum-of-Years Digits

An asset often loses more of its value early in its lifetime A method that exhibits this dynamic is desirable

Assume an asset depreciates from price P to salvage value S in N years First compute the sum-of-years as T D 1 C 2 C


C N The depreciation for the years after the asset’s purchase is:

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Table 53.1 Sum-of-Years General Example

Year Number Annual Depreciation

::

For the i th year of the asset’s use, the annual depreciation is:

NC 1 i

For our example, N D 5 and the sum of years is T D 1 C 2 C 3 C 4 C 5 D 15 The depreciation during the first year is

.$20; 000 $5; 000/ 5

15 D $5; 000

Table 53.2describes how Declining Balance would depreciate the asset

Table 53.2 Sum-of-Years Example

1 $20; 000 $5; 000/155 D $5; 000 $15; 000:00

2 $20; 000 $5; 000/154 D $4; 000 $11; 000:00

3 $20; 000 $5; 000/153 D $3; 000 $8; 000:00

4 $20; 000 $5; 000/152 D $2; 000 $6; 000:00

5 $20; 000 $5; 000/151 D $1; 000 $5; 000:00

As expected, the value after N years is S

S D P 5 years’ depreciation/

10.P S /C 4

10.P S /C 3

10.P S /C 2

10.P S /C 1

10.P S /



Declining Balance (DB)

Recall that the straight line method assumes a constant depreciation value Conversely, the declining balance method assumes a constant depreciation rate per year And like the sum-of-years method, more depreciation tends to occur earlier in the asset’s life

Assume the price of a depreciating asset is P and its salvage value after N years is S You could assume the asset depreciates by a factor of N1 (or a rate of 100N %) This method is known as single declining balance The annual depreciation is:

1

N.previous year’s value/

So for our example, the depreciation during the first year is $20;0005 D $4; 000.Table 53.3describes how declining balance would depreciate the asset

Table 53.3 Declining Balance Example

1 $20;000:005 D $4; 000:00 $16; 000:00

2 $16;000:005 D $3; 200:00 $12; 800:00

3 $12;800:005 D $2; 560:00 $10; 240:00

4 $10;240:005 D $2; 048:00 $8; 192:00

5 $12;800:005 D $1; 638:40 $6; 553:60

DB Factor

You could also accelerate the depreciation by increasing the factor (and hence the rate) at which depreciation occurs Other commonly accepted depreciation rates are200N % (called double declining balance as the depreciation factor becomes N2) and 150N % Investment Analysis enables you to choose between these three types for declining balance: 2 (with 200N % depreciation), 1.5 (with

150

N %), and 1 (with100N %)

Declining Balance and the Salvage Value

The declining balance method assumes that depreciation is faster earlier in an asset’s life; this is what you wanted But notice the final value is greater than the salvage value Even if the salvage value were greater than $6,553.60, the final year-end value would not change The salvage value never enters the calculation, so there is no way for the salvage value to force the depreciation to assume its value.Newnan and Lavelle (1998)describe two ways to adapt the declining balance method to assume the salvage value at the final time One way is as follows:

Suppose you call the depreciated value after i years V i / This sets V 0/D P and V N / D S

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 If V N / > S according to the usual calculation for V N /, redefine V N / to equal S

 If V i/ < S according to the usual calculation for V i/ for some i (and hence for all subsequent

V i / values), you can redefine all such V i / to equal S

This alteration to declining balance forces the depreciated value of the asset after N years to be S and keeps V i / no less than S

Conversion to SL

The second (and preferred) way to force declining balance to assume the salvage value is by conversion to straight line If V N / > S , the first way redefines V N / to equal S ; you can think of this as converting to the straight line method for the last timestep

If the V N / value supplied by DB is appreciably larger than S , then the depreciation in the final year would be unrealistically large An alternate way is to compute the DB and SL step at each timestep and take whichever step gives a larger depreciation (unless DB drops below the salvage value) After SL assumes a larger depreciation, it continues to be larger over the life of the asset SL forces the value at the final time to equal the salvage value As an algorithm, this looks like the following statements:

V(0) = P;

for i=1 to N

if DB step > SL step from (i,V(i))

take a DB step to make V(i);

else

break;

for j = i to N

take a SL step to make V(j);

The MACRS, which is discussed in the section that describes theDepreciation Tablewindow, is actually a variation on the declining balance method with conversion to the straight line method

Rate Information

The Tools Menu

Figure 53.5shows the Tools menu

Figure 53.5 The Tools Menu

The Tools! Define Rates menu offers the following options

MARR opens theMinumum Attractive Rate of Return (MARR)dialog box

Income Tax Rate opens theIncome Tax Specificationdialog box

Inflation opens theInflation Specificationdialog box

Dialog Box Guide

Minimum Attractive Rate of Return (MARR)

Selecting Tools! Define Rates ! MARR from the Investment Analysis dialog box menu bar opens the MARR dialog box that is displayed inFigure 53.6