If gross investment is 40 crore and depreciation is 60 crore, what will be the sign of net investment?
Answer and explanation
Correct answer: Negative
Calculate Net Investment = Gross Investment − Depreciation = 40 crore − 60 crore = −20 crore. Since the result is below zero, net investment has a negative sign. This indicates that investment did not fully replace the capital consumed during the period. A zero result would require equal amounts, while a positive result would require gross investment to exceed depreciation.
Frequently asked questions
What is the correct answer to this question?
Negative
Why is this the correct answer?
Calculate Net Investment = Gross Investment − Depreciation = 40 crore − 60 crore = −20 crore. Since the result is below zero, net investment has a negative sign. This indicates that investment did not fully replace the capital consumed during the period. A zero result would require equal amounts, while a positive result would require gross investment to exceed depreciation.
Which subject and chapter does this question cover?
This is a Class 11 Accountancy question. Chapter: Depreciation, Provisions, and Reserves.
