Asked by Elizabeth Offer on Jun 30, 2024
Verified
The amount of the estimated average income for a proposed investment of $90,000 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 $25,300, is
A) $12,650
B) $25,300
C) $6,325
D) $45,000
Depreciation
Allocating the value of a tangible asset over the period it is expected to be used, in a systematic manner.
Fixed Asset
A long-term tangible piece of property or equipment that a firm owns and uses in its operations to generate income, not expected to be consumed or converted into cash within a year.
Useful Life
The estimated period over which an asset is expected to be usable by an organization, affecting its depreciation calculation.
- Calculate and interpret the average rate of return for an investment.
- Recognize the impact of depreciation and other factors on the profitability and cash flow of capital investments.
Verified Answer
Learning Objectives
- Calculate and interpret the average rate of return for an investment.
- Recognize the impact of depreciation and other factors on the profitability and cash flow of capital investments.
Related questions
The Expected Average Rate of Return for a Proposed Investment ...
The Method of Analyzing Capital Investment Proposals That Divides the ...
The Average Rate of Return for This Investment Is ...
The Expected Average Rate of Return for a Proposed Investment ...
The _____ Method of Analyzing Capital Investment Proposals Divides the ...