EKPN Company Recorded the Following Operating Data What Is EKPN Company's Average Operating Assets for 2020?
A)$770,000

question 19

Multiple Choice

EKPN Company recorded the following operating data: $$\begin{array} { l l } \text { Sales } & \$ 1,250,000 \\\text { Contribution margin } & 485,000 \\\text { Total direct fixed costs } & 400,300 \\\text { Total operating assets Jan. 1, 2020 } & 750,000 \\\text { Total operating assets Dec. 31, 2020 } & 790,000 \\\text { EKPN Compary's desired return } & 12 \%\end{array}$$ What is EKPN Company's average operating assets for 2020?

• A)$770,000
• B)$750,000
• C)$790,000
• D)$150,000

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Definitions:

Net Present Value

The divergence in current value between cash receipts and disbursements over a set period.

Investment Projects

Initiatives undertaken by businesses to invest in resources with the expectation of generating future revenues or reducing costs.

Discount Factor

A factor employed in the discounted cash flow (DCF) methodology to calculate the current value of anticipated cash flows.

Payback Period

The length of time it takes for an investment to generate cash flows sufficient to recover the initial cost of the investment.