If gross investment is 900 and net investment is 630, what percentage of gross investment represents depreciation?
Answer and explanation
Correct answer: Thirty percent
The relationship is: Net Investment = Gross Investment − Depreciation. Therefore, depreciation = 900 − 630 = 270. To find its share in gross investment, calculate (270 ÷ 900) × 100 = 30%. Thus, depreciation represents 30% of gross investment. Seventy percent is the share of net investment, not depreciation; the other options do not match the calculated ratio.
Frequently asked questions
What is the correct answer to this question?
Thirty percent
Why is this the correct answer?
The relationship is: Net Investment = Gross Investment − Depreciation. Therefore, depreciation = 900 − 630 = 270. To find its share in gross investment, calculate (270 ÷ 900) × 100 = 30%. Thus, depreciation represents 30% of gross investment. Seventy percent is the share of net investment, not depreciation; the other options do not match the calculated ratio.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates.
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