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luda_lava [24]
3 years ago
9

The expected average rate of return for a proposed investment of $650,000 in a fixed asset, with a useful life of 4 years, strai

ght-line depreciation, no residual value, and an expected total net income of $240,000 for the 4 years, is
a.18.5%
b.13.9%
c.36.9%
d.9.25%
Business
1 answer:
Degger [83]3 years ago
3 0

Answer:

18.5%

Explanation:

The formula to compute the average rate of return is shown below:

= Annual net income ÷ average investment

where,  

Annual net income equal to

= Expected total net income ÷ number of years

= $240,000 ÷ 4

= $60,000

And, the average investment would be

= (Initial investment + salvage value) ÷ 2

= ($650,000 + $0) ÷ 2

= $4650,000 ÷ 2

= $325,000

Now put these values to the above formula  

So, the rate would equal to

= $60,000 ÷ $325,000

= 18.5%

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Explanation:

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8 0
3 years ago
During its first and second years of operations, Rogers Company, a corporation using a periodic inventory system, made undiscove
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Net Income understated by $20,000

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In the Second year,

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