The amount of the average investment for a proposed investment of $120,000 in a fixed asset with a useful life of 4 years,straight-line depreciation,no residual value,and an expected total net income of $21,600 for the 4 years,is

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Quizplus · Accepted Answer

The average investment for a fixed asset using straight-line depreciation with no residual value is calculated by taking the sum of the initial investment and the value at the end of its useful life (which is $0 in this case because of no residual value) and dividing by 2. So, for a $120,000 investment over 4 years, the average investment is ($120,000 + $0) / 2 = $60,000.

The Amount of the Average Investment for a Proposed Investment