If gross investment is 120 crore and net investment is 90 crore, what will depreciation be?
Answer and explanation
Correct answer: 30 crore
Start with Net Investment = Gross Investment − Depreciation. Rearranging gives Depreciation = Gross Investment − Net Investment. Therefore, depreciation = 120 crore − 90 crore = 30 crore. The values 120 and 90 are already the given gross and net investments. Adding them to get 210 crore is incorrect because depreciation is the difference between gross and net investment.
Frequently asked questions
What is the correct answer to this question?
30 crore
Why is this the correct answer?
Start with Net Investment = Gross Investment − Depreciation. Rearranging gives Depreciation = Gross Investment − Net Investment. Therefore, depreciation = 120 crore − 90 crore = 30 crore. The values 120 and 90 are already the given gross and net investments. Adding them to get 210 crore is incorrect because depreciation is the difference between gross and net investment.
Which subject and chapter does this question cover?
This is a Class 11 Accountancy question. Chapter: Depreciation, Provisions, and Reserves.
