If gross investment is ₹200 crore and depreciation is ₹50 crore, what will be the net investment?
Answer and explanation
Correct answer: ₹150 crore
Apply the formula Net Investment = Gross Investment − Depreciation. Substituting the figures gives ₹200 crore − ₹50 crore = ₹150 crore. This is the part that remains as a net addition after the capital consumed during the year is allowed for. ₹250 crore incorrectly adds depreciation, ₹50 crore is only depreciation, and ₹200 crore is the gross figure.
Frequently asked questions
What is the correct answer to this question?
₹150 crore
Why is this the correct answer?
Apply the formula Net Investment = Gross Investment − Depreciation. Substituting the figures gives ₹200 crore − ₹50 crore = ₹150 crore. This is the part that remains as a net addition after the capital consumed during the year is allowed for. ₹250 crore incorrectly adds depreciation, ₹50 crore is only depreciation, and ₹200 crore is the gross figure.
Which subject and chapter does this question cover?
This is a Class 11 Accountancy question. Chapter: Depreciation, Provisions, and Reserves.
