The expected average rate of return for a proposed investment of $650,000 in a fixed asset, with a useful life of four years, straight-line depreciation, no residual value, and an expected total net income of $240,000 for the four years, is

A) 13.9%
B) 36.9%
C) 18.5%
D) 9.25%

Average Rate of Return

A financial ratio used to evaluate the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost, typically expressed as a percentage.

Straight-Line Depreciation

A strategy for apportioning the cost of a concrete asset into equal yearly sums throughout its serviceable life.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been deducted from total revenue.