If gross investment in a country is 300 and net investment is 240, what is depreciation?
Answer and explanation
Correct answer: 60
Use the identity Gross Investment = Net Investment + Depreciation. Rearranging gives Depreciation = Gross Investment − Net Investment. Thus, depreciation = 300 − 240 = 60. The value 540 comes from incorrectly adding the two given figures, while 240 and 300 are already the stated net and gross investment values, not the depreciation amount.
Frequently asked questions
What is the correct answer to this question?
60
Why is this the correct answer?
Use the identity Gross Investment = Net Investment + Depreciation. Rearranging gives Depreciation = Gross Investment − Net Investment. Thus, depreciation = 300 − 240 = 60. The value 540 comes from incorrectly adding the two given figures, while 240 and 300 are already the stated net and gross investment values, not the depreciation amount.
Which subject and chapter does this question cover?
This is a Class 11 Accountancy question. Chapter: Depreciation, Provisions, and Reserves.
