The amount of the average investment for a proposed investment of $120,000 in a fixed asset with a useful life of four years, straight-line depreciation, no residual value, and an expected total net income of $21,600 for the four years is

A) $30,000
B) $21,600
C) $5,400
D) $60,000

Question

Alyssa Rivera · Accepted Answer

Final Answer : D, Explanation :  The average investment is calculated as the sum of the initial investment and the value at the end of its useful life, divided by 2. With straight-line depreciation and no residual value, the asset's value decreases to $0 over its useful life. Thus, the average investment is ($120,000 + $0) / 2 = $60,000.

The amount of the average investment for a proposed investment of $120,000 in a fixed asset with a useful life of four years, straight-line depreciation, no residual value, and an expected total net income of $21,600 for the four years is

A) $30,000
B) $21,600
C) $5,400
D) $60,000

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Learning Objectives

Related questions

The amount of the average investment for a proposed investment of $120,000 in a fixed asset with a useful life of four years, straight-line depreciation, no residual value, and an expected total net income of $21,600 for the four years isA) $30,000B) $21,600C) $5,400D) $60,000

Definitions

Learning Objectives

Learning Objectives

Related questions

The amount of the average investment for a proposed investment of $120,000 in a fixed asset with a useful life of four years, straight-line depreciation, no residual value, and an expected total net income of $21,600 for the four years is

A) $30,000
B) $21,600
C) $5,400
D) $60,000