The Amount of the Estimated Average Income for a Proposed

question 26

Multiple Choice

The amount of the estimated average income for a proposed investment of $60,000 in a fixed asset, giving effect to depreciation (straight-line method) , with a useful life of four years, no residual value, and an expected total income yield of $22,300, is:

• A) $10,800.
• B) $5,575.
• C) $5,400.
• D) $15,000.

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Definitions:

Quarterly Payments

Payments made four times a year at three-month intervals.

Investment Trusts

Collective investment schemes that pool money from investors to purchase a diversified portfolio of assets.

Compounded Quarterly

The process of calculating interest on both the initial principal and accumulated interest over four periods within a year.

Economically Equivalent

A term describing financial items or situations that have the same value or effect when all factors are considered.