The asset can be purchased for $40,000 and is expected to last four years, at which time it would have no value. Therefore, it is amortized on a straight-line basis over that period. Earnings After Tax Amortized Capital Asset Capital cost $30,000 Year 1 $2,000 22,500 Year 2 4,000 15,000 Year 3 8,000 7,500 Year 4 2,000 0 Average* 16,000/4 = $4,000 75,000/5 = 15,000 Average accounting return is: