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21 December, 14:20

The expected average rate of return for a proposed investment of $650,000 in a fixed asset, with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total net income of $240,000 for the 4 years, is

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  1. 21 December, 15:13
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    The expected average rate of return in the fixed asset above is 36.92%. The rate of return is the income or loss of a proposed investment in a specified amount of time. In this case, a company wants to buy a 4-year life fixed asset which can increase the company's income by $240,000. We can calculate the rate of return by dividing the net income from the investment with the proposed investment to obtain the portion of return received from the investment. Formula: (Net Income From The Investment/Proposed Investment) x 100%.
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