The expected average rate of return for a proposed investment of $699,000 in a fixed asset, with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total net income of $216,000 for the 4 years, is (round to two decimal points).
a.7.73%
b.30.90%
c.15.45%
d.13.90%
please explain
Average rate of return = Annual net income / Initial investment
= 216000 / 699000
= 30.90%
Option b. is correct answer.
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