Final answer:
The average investment for a proposed investment of $125,000 in a fixed asset with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total income of $28,800 for the 4 years is -$2,450.
Step-by-step explanation:
The average investment for a proposed investment of $125,000 in a fixed asset with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total income of $28,800 for the 4 years can be calculated as follows:
First, find the annual depreciation amount by dividing the initial investment by the useful life: $125,000 / 4 = $31,250.
Next, subtract the annual depreciation from the expected total income to find the average investment: $28,800 - $31,250 = -$2,450.
Therefore, the average investment for this investment is -$2,450.