The Expected Average Rate of Return for a Proposed Investment

question 7

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 is:

• A) 24%
• B) 22%
• C) 45%
• D) 10%

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Definitions:

Likability

The quality that makes a person pleasant, friendly, and easy to like.

Mere Exposure Effect

The mere exposure effect is a psychological phenomenon where people tend to develop a preference for things merely because they are familiar with them.

Soft-Drink Companies

Businesses that manufacture and market non-alcoholic beverages, especially carbonated drinks.

Elaboration Likelihood Model

A theory that explains how people are persuaded, describing two paths of persuasion: the central route and the peripheral route.