Asked by Briah Hightower on Jun 15, 2024
Verified
Gross investment will equal net investment when
A) depreciation is positive.
B) depreciation is negative.
C) depreciation is zero.
Gross Investment
The total amount of capital invested in a firm, including replacements for depreciation and new investments for expansion.
Net Investment
The difference between total investment in an economy and the depreciation of capital.
Depreciation
The process by which capital assets lose value over time due to use, wear and tear, or obsolescence.
- Comprehend the concept of depreciation and its effect on net and gross investment.
Verified Answer
VR
Vivienne RozennJun 20, 2024
Final Answer :
C
Explanation :
Net investment is gross investment minus depreciation. Therefore, if depreciation is zero, gross investment will be equal to net investment.
Learning Objectives
- Comprehend the concept of depreciation and its effect on net and gross investment.