EVAU EXERCISES CLM June and July 2020-2022

Index:

Payback
Dead Point
Loans
Balance Sheet (+ FM and Ratios)
PMP and FIFO
PMME and PMMF
Productivity

PAYBACK, VAN AND TIR

(JUNE 2020) A company is studying the possibility of undertaking a project

two-year investment. The project requires the purchase of an asset with
an initial disbursement of €86,000. With the activity generated by this asset, it
They expect cash flows of €45,000 in the first year and €51,000 in the second year.
It is known that the interest rate on capital or cost of capital is 6% per year. It
ask for

a) Calculate the Net Present Value (NPV) and the Internal Rate of Return (IRR) of the
investment.

b) Explain whether the investment is acceptable according to the NPV criterion.

c) Explain whether the investment is acceptable according to the IRR criterion.

(JULY 2020)

1
(JUNE 2021)

The manager of the financial department of a company has to decide if they are
acceptable the investment projects A and B and which is the best for your company
according to the criteria of the Internal Rate of Return (IRR). Project A assumes a
initial disbursement of €70,000 and would generate cash flow in two years
expected of €82,500. Project B requires an initial outlay of €85,000 and
The expected cash flows are €40,000 in the first year and €52,000 in the
second year.

It is requested:

a) Calculate the Internal Rate of Return (IRR) for each project.

b) Reasonably justify which of the two investments should be undertaken.

company.

c) If the company's cost of capital is 7% per year, comment on whether they are
acceptable investment projects A and B.

(JULY 2021)

A company must evaluate the following investment project:

Initial disbursement of €850,000

Project duration: 3 years

Expected cash flows of €200,000 in the first year, €300,000 in the

second year and €400,000 in the third year.

Cost of capital or interest rate on capital of 5% per annum.

It is requested:

a) Calculate the payback period of this investment.

b) Calculate the Net Present Value (NPV) of that investment.
c) Reason whether the project should be carried out taking both into account.
criteria.
d) Choose one of the two criteria and justify your answer.

2
(JUNE 2022)

A company faces an investment decision that involves a

initial disbursement of 60,000 euros generates an expected cash flow in the first
year of 37,000 euros and an expected cash flow in the second year of 28,000
euros. It is known that the interest rate of the capital or cost of capital is 7%.

It is requested:

a) Calculate the Net Present Value (NPV) and the Internal Rate of Return (IRR) of the
investment.

b) Explain whether the investment is acceptable according to the NPV criterion.

c) Explain whether the investment is acceptable according to the IRR criterion.

(JULY 2022)

The manager of the financial department of a company has to decide if they are
acceptable investment projects A and B and which is the best for your company
according to the criteria of the Internal Rate of Return (IRR). Project A assumes a
initial disbursement of €80,000 and would generate a cash flow after two years
expected of €93,800. Project B requires an initial investment of €83,000 and
The expected cash flows are €35,000 in the first year and €55,000 in the
second year.

It is requested:

a) Calculate the Internal Rate of Return (IRR) of each project.

b) Reasonably justify which of the two investments should be undertaken.

company.

c) If the company's cost of capital is 7% per year, comment on whether it is

acceptable investment projects A and B.

3
Dead point

(JUNE 2020) A company manufactures a product with a unit variable cost

unknown and some fixed costs of 1,000 euros. Sells said product for 4
euros/unit. If you sell 1,000 units, you make a profit of 1,000 euros.

It is requested:

a) Calculate the unit variable cost.

b) Calculate the break-even point and explain the meaning of the obtained result.

c) Calculate the total costs and revenues of the two situations - profit of
1,000 euros and breakeven - and create your graphical representation.

(JULY 2020)

JUNE 2021

An experienced artisan in the natural stone necklace sector has

decided to dedicate himself to the production of said artisanal product
which will be sold at a unit price of 150 €. The fixed costs derived from the
Production and sale of the product amount to €750,000.

It is requested:

a) Knowing that the craftsman will reach the break-even point or threshold of profitability
With 9.375 units of production, calculate the variable unit cost that it bears.

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b) Calculate the income, costs, and profit derived from the production and sale of
8,000 units. Justify the sign (positive or negative) of the profit obtained.
relating the amount of production to the break-even point.

c) Calculate the price at which the craftsman should sell the product if they wanted to
reach the break-even point with 8,000 units of production.

(JUNE 2022)

July 2022

VENTUM, S.L. is a company dedicated to the manufacture of air devices.

conditioned. So far it has used an imported part for its manufacture
from France, paying a price of 50 € per unit. At this moment the company
It is being considered to address the production of said piece. For this, it has planned.
fixed costs of €80,000 and a variable cost per unit of €34/unit. It is requested:

a) Calculate from which amount it is more profitable to produce than to buy it.
piece.

b) Represent the situation with an explanatory graph indicating the threshold of

production, the area where the company is interested in buying the part from the supplier
external and the area where the company is interested in manufacturing it.

c) Due to an increase in the demand for air conditioning units, the

The company needs 6,000 pieces. In this case, explain rationally what...
should the company make (manufacture or buy those parts). Carry out the calculations.
necessary mathematicians.

5
LOANS

(JULY 2020)

BALANCE SHEET (+ FM AND RATIOS)

(JUNE 2020) The company PASITO, SA., dedicated to the marketing of

sports teams, presents the following information related to its
balance sheet as of December 31, 2019 (amounts in euros):

100,000
28,000
inmovilizado material: 80.000; Clientes: 32.000; Proveedores: 30.000; Banco,
3.000
20,000; Creditors for services rendered: 5,500; Long-term liabilities with
30,000

It is requested:

a) Determine the amount of the Legal Reserve account.

b) Prepare the Balance Sheet properly classified and organized.

c) Calculate the working capital, explain its meaning and indicate measures to
improve it.

(JUNE 2020)

The company NEVADA, SA., dedicated to the marketing of equipment

sports, presents the following information related to its Balance of
Situation as of December 31, 2020 (amounts in euros):

21,600
15,000
inmovilizado material: 3.000; Clientes: 5.000; Proveedores: 3.000; Banco, c/c:
18,600; Land and natural assets: 10,000; Equipment for processing of
1,500
50,000

a) Determine the amount of the Legal Reserve account.

6
b) Prepare the Statement of Financial Position properly classified and organized.

c) Calculate the working capital and explain its meaning.

d) Calculate the following ratios and interpret the result:

d.1. Total assets / Total liabilities

d.2. Net worth / Total liabilities

(JULY 2021)

A corporation dedicated to the buying and selling of a certain

product, as of December 31, 2020 has the following elements
patrimoniales valorados en euros: Mercaderías: 17.000; Amortización
10,000
€900
del ejercicio (beneficios): 2.000; Construcciones: 74.500; Proveedores de
20,000
13,000; Suppliers: 8,500; Bank current account: 7,000; Accumulated amortization of
inmovilizado intangible: 1.000; Deudas a corto plazo con entidades de crédito:
30,000

It is requested:

a) Determine the amount of the Legal Reserve account.

b) Prepare the properly classified and organized Balance Sheet.

c) Calculate the working capital, explain its meaning and indicate measures to
improve it.

(JUNE 2022)

The company ANDARES, SA., dedicated to the marketing of footwear

sports club presents the following information related to its balance of
situation as of December 31, 2021 (amounts in euros):

57,000
18,000
inmovilizado material: 40.000; Clientes: 12.000; Proveedores: 20.000; Banco,
13,000
Elementos de transporte: 40.000; Acreedores por prestación de servicios: 1.500;
Long-term debts with credit institutions: 20,000; Legal reserve, to
determine. It is requested:

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a) Determine the amount of the Legal Reserve account.

b) Prepare the properly classified and ordered Balance Sheet.

c) Calculate the working capital, explain its meaning and indicate measures to
improve it.

July 2022

A corporation dedicated to the buying and selling of a certain

Product, as of December 31, 2021 has the following elements
patrimoniales valorados en euros: Mercaderías: 9.000; Amortización acumulada
from fixed assets
(beneficios): 2.000; Equipos para procesos de información: 3.000; Mobiliario:
17.500; Deudores: 1.500; Proveedores de inmovilizado a largo plazo: 3.000;
Propiedad industrial: 3.000; Clientes: 8.000; Proveedores: 6.500; Banco c/c:
30,000
1.000
60,000

It is requested:

a) Determine the amount of the Legal Reserve account.

b) Prepare the classified and organized Statement of Financial Position.

c) Calculate the working capital, explain its meaning and indicate measures to
improve it.

PMP and FIFO

(JUNE 2020) A company dedicated to the marketing of guitars

Electric companies present the following information related to the month of January 2018.
On January 1st, there are initial stock of 200 guitars in the warehouse.
whose unit price is €950/unit. Throughout the month of January, it carries out the
next operations: on January 3, buy 75 guitars at €1,200 each
On January 10th, he sells 225 guitars for €1,750 each; and on the 24th
In January, he bought 25 guitars at €1,100 each.

It is requested: Calculate the value of the final stock as of January 31, doing the
warehouse record, applying the following valuation methods:

a) The weighted average price method.

b) The FIFO method.

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PMME and PMMF

The company DIVERSIÓN, S.A. is an industrial company that is dedicated to the

manufacturing of leather bags. Over the last year, it carried out the following
operations:

He bought and consumed raw materials for the manufacture of his products for
value of 90,000 €, maintaining an average stock of 10,000 €.
annual production, at cost prices, was €180,000, and the average stock of
The products in progress amounted to €6,000. The sales, at cost price, of the bags
finished amounts to €270,000, maintaining an average stock of 6,750 bags
€. The sale of bags, at selling price, was €337,500. The average balance of
Accounts receivable is €28,125 and the average balance of suppliers is €11,250.

Consider that the company works 360 days a year.

It is requested:

a) The average period of economic maturation and explain its meaning.

b) The average financial maturation period and explain its meaning.

PRODUCTIVITY

(JUNE 2021)

9
(JULY 2021)

An industrial company has obtained 5,000 units during the month of October.
of product, with a selling price of €20 per unit. In its manufacturing
2,000 hours of labor (unit cost of €15) and 1,000 Kg. of material
first (unit cost of €20). It is requested:

a) Calculate the productivity of labor and raw materials in October.

Explain what the obtained results mean.

b) Knowing that in September 2,500 worker hours were used for the
same amount of production, calculate the rate of variation of productivity
of the labor between September and October.

c) What was the company's overall productivity in October? Comment on it.

obtained result.

d) The average overall productivity of the sector to which the company belongs is
1,2. Assuming that the selling price is the same for all companies,
indicate possible causes that explain the difference in global productivity
between the company and its sector.

WILSON

(JULY 2021)

A trading company buys and sells 12,960 units of a product each year.
determined product. The management cost of each order is 60 euros and the
The cost of having a unit stored for a year is 3 euros. The
The supplier takes 5 days to deliver an order. Likewise, it is known that there is no
minimum safety stock and that the company operates 360 days a year. It is requested:
Calculate and explain the results obtained according to the Wilson model in the
following sections:

a) Optimal order volume.

b) Annual number of orders.

c) Total annual cost of orders.

d) Frequency between orders or time that elapses between two orders

consecutive.

e) Reorder point.

10