The amount of the estimated average income for a proposed investment of $60,000 in a fixed asset, giving effect to depreciation (straight-line method), with a useful life of four years, no residual value, and an expected total income yield of $22,300, is:

Question

Quizplus · Accepted Answer

The average income is calculated by subtracting the total depreciation from the total income yield and then dividing by the number of years. Depreciation per year is $60,000 / 4 = $15,000. Total depreciation over four years is $60,000. Total income yield is $22,300. Average income = ($22,300 - $60,000) / 4 = $5,575.

The Amount of the Estimated Average Income for a Proposed