1. Why is the number "1" added to each rate in the average annualized compounded return formulas?
To account for the original investment amount.
To eliminate negative rates.
To account for dividends.
2. Equipment is purchased for $1,000,000 (no salvage value) in cash. The company uses straight line depreciation for 7 years. Assume no other fixed assets. What is the Accumulated Depreciation balance at the end of year 3?
$571,429
$142,857
$428,571
$0