The Expected Average Rate of Return for a Proposed Investment

question 88

Multiple Choice

The expected average rate of return for a proposed investment of $900,000 in a fixed asset, with a useful life of five years, recognition is given to the effect of straight-line depreciation on the investment, no residual value, and an expected total net income of $360,000 for the 5 years, is:

• A) 18.5%.
• B) 40%.
• C) 12.5%.
• D) 16%.

Discuss the importance of personality traits for specific job roles, especially in sales.

Understand the role of prices in markets as signals that coordinate buyers' and sellers' decisions.

Recognize the difference between the law of demand and the concept of cost in production.

Identify factors leading to changes in supply and demand, including government interventions like taxes and subsidies.

---

Definitions:

Safety Inventory

Additional stock that is kept on hand to protect against variability in demand or supply, ensuring product availability.

Aggregate Planning

The process of creating a production plan to meet demand over a medium-term horizon while minimizing costs.

Production Level

The quantity of goods or services produced within a specified period by a company, factory, or manufacturing plant.

Forecast Errors

Discrepancies between predicted values and actual outcomes in forecasting, which can arise due to unexpected market changes or inaccurate data.