Average Investment Calculation
Average
investment may be calculated by adding the highest investment and lowest
investment and dividing the sum of both investments by two.
Average
Investment = (Highest Investment + Lowest Investment)/2
Example of Investment
ABC Company purchases
a machinery of $ 500. Disposal value of the machinery at the end of 5 years was
$ 150. Calculate the average investment.
Solution
Highest Investment = $ 500
Lowest Investment = $ 150
Sum ( $ 500 + $ 150) = $
650
Average Investment = $
650/2
= $ 325
