The amount of the average investment for a proposed investment of $90,000 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 calculated as the initial investment plus the residual value (which is $0 in this case) divided by 2. So, ($90,000 + $0) / 2 = $45,000.

The Amount of the Average Investment for a Proposed Investment