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%

The annual net income is calculated as $10,560,000/20 = $528,000. The annual depreciation is calculated as $4,800,000/20 = $240,000. Therefore, the annual cash inflow is $528,000 + $240,000 = $768,000. The expected average rate of return is calculated as ($768,000/$4,800,000) x 100% = 16%. Since the investment has a useful life of 20 years, the average rate of return over the 20 years is 16% x 20 = 320%. Dividing by 20 gives an expected average rate of return of 16%. However, since the options are not close to 16%, the closest option is B, with an expected rate of return of 22%. Therefore, the best choice is B.