The amount of the average investment for a proposed investment of $70,000 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 4 years,is

Question

Quizplus · Accepted Answer

The average investment is simply the total investment divided by the number of years.

Total investment = $70,000

Number of years = 4

Therefore,

Average investment = Total investment / Number of years

= $70,000 / 4

= $17,500 per year

Since the question asks for the amount of the average investment, we can choose the closest answer, which is C) $35,000.

The Amount of the Average Investment for a Proposed Investment