The Expected Average Rate of Return for a Proposed Investment

question 129

Multiple Choice

The expected average rate of return for a proposed investment of $4,800,000 in a fixed asset, using straight-line depreciation, with a useful life of 20 years, no residual value, and an expected total net income of $10,560,000 over the 20 years is

• A) 24%
• B) 22%
• C) 45%
• D) 10%

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Definitions:

Rail

A mode of transportation that involves the movement of goods and passengers on tracks with trains.

Freight Transportation

The movement of goods and materials through various modes of transportation, such as trucks, ships, and trains.

Freight Bill

An invoice issued by a carrier detailing the charges applicable for the shipment of goods.

Total Cost

The complete sum of all costs associated with producing or acquiring goods and services, including direct, indirect, fixed, and variable costs.