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AFC Written Test I Call 17th January 2020 MULTIPLE CHOICE TEST (individual assignment) 1. Company A is an Italian company: it produces high-quality sweets and sells them in Europe. In the following table, you can find an extract of the 2019 financial statements of Company A that shows some selected financial data. Cash flow statement 2019 [k€] Delta NWC (final - initial) 7,500 D&A 5,000 Income taxes paid 2,300 Dividends paid 900 Interests paid 400 Cash flow from operating activities 14,000 Income statement 2019 [k€] Cost of sales 25,000 Other operating expenses 3,000 General and administrative expenses 5,000 Based on the available financial data and knowing that there ar e no deferred taxes, which answer is correct? (4 Points) A. EBIT = 20,100 k€ ; Revenues = 53,100 k€ B. EBIT = 19,200 k€ ; Revenues = 52,200 k€ C. EBIT = 4,200 k€ ; Revenues = 37,200 k€ D. EBIT = 14,200 k€ ; Revenues = 47,200 k€ Solution Ebit is calculated starting from the cash flow statement (indirect method) as: Cash Flow From Operating Activities 14,000 k€ - D & A 5,000 k€ + Delta NWC (final – initial) 7,500 k€ + i n c o m e t a x e s p a i d 2,300 k€ + i n t e r e s t s p a i d 400 k€ E B I T 19,200 k€ Revenues = EBIT + Cost of sales + other operating expenses + general and administrative expenses = 19,200 k€ + 25,000 k€ + 3,000 k€ + 5,000 k€ = 52,200 k€ 2. Company B produces and sells office desks. In the following Tab le, you can find some financial and non-financial data referred to 2019. COMPANY B - DATA (2019) Number of office desks sold [#] 800,000 Selling Price [€/office desk] 250 Unitary Raw Materials cost [€/office desk] 125 Trade Receivables (final) [€] 20,000,000 Trade Receivables (initial) [€] 15,000,000 Other Operating Income [€] 1,000,000 Changes in Inventories of Finished Goods and…