If net investment is 45 and depreciation is 35, what will gross investment be?
Answer and explanation
Correct answer: 80
The relationship is Gross Investment = Net Investment + Depreciation. Substituting the given values gives Gross Investment = 45 + 35 = 80. The value 10 is only the difference between the two figures, while 45 and 35 are the given net investment and depreciation. Gross investment must include both the net addition to capital and the replacement amount represented by depreciation.
Frequently asked questions
What is the correct answer to this question?
80
Why is this the correct answer?
The relationship is Gross Investment = Net Investment + Depreciation. Substituting the given values gives Gross Investment = 45 + 35 = 80. The value 10 is only the difference between the two figures, while 45 and 35 are the given net investment and depreciation. Gross investment must include both the net addition to capital and the replacement amount represented by depreciation.
Which subject and chapter does this question cover?
This is a Class 11 Accountancy question. Chapter: Depreciation, Provisions, and Reserves.
