The expected average rate of return for a proposed investment of $800,000 in a fixed asset with a useful life of four years, straight-line depreciation, no residual value, and an expected total net income of $360,000 for the four years is

22.5%

Explanation:

For computation of return on investment first we need to find out the average investment and average income per year which is shown below:-

Average investment = Proposed investment : Average

= $800,000 : 2

= $400,000

Now, the Average income per year = Expected total net income : Number of year

= $360,000 : 4

= $90,000

Return on investment = Average income per year : Average investment

= $90,000 : $400,000

= 0.225

or

= 22.5%