If net investment is 75 and gross investment is 200, what will be the depreciation?
Answer and explanation
Correct answer: 125
The accounting identity is Gross investment = Net investment + Depreciation. Rearranging gives Depreciation = Gross investment − Net investment. Therefore, depreciation = 200 − 75 = 125. Option A is correct. The values 75 and 200 are already the given net and gross investments, while 275 would result from adding them incorrectly.
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What is the correct answer to this question?
125
Why is this the correct answer?
The accounting identity is Gross investment = Net investment + Depreciation. Rearranging gives Depreciation = Gross investment − Net investment. Therefore, depreciation = 200 − 75 = 125. Option A is correct. The values 75 and 200 are already the given net and gross investments, while 275 would result from adding them incorrectly.
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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