The expected average rate of return for a proposed investment of $600,000 in a fixed asset, with a useful life of four years, straight-line depreciation, no residual value, and an expected total net income of $240,000 for the 4 years, is:
Average return = Agg net income/no of years
Where Agg net income =Total net income*Number of years
So it will be = (240000*4)/4= 240000
annual Avg rate of return = 240000/600000*100=40%
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