Which of the following is equal to net investment?Multiple choice question.Gross investment minus depreciationDepreciation plus GDPGDP minus final salesGross investment minus final sales
Question
Which of the following is equal to net investment?Multiple choice question.Gross investment minus depreciationDepreciation plus GDPGDP minus final salesGross investment minus final sales
Solution
The correct answer is "Gross investment minus depreciation".
Here's why:
Net investment is the total amount of money that a company has invested in its business, minus depreciation. Depreciation is the decrease in value of an asset over time, due to factors such as wear and tear.
So, to calculate net investment, you start with the gross investment (the total amount of money invested) and then subtract the depreciation.
The other options are not correct because they involve GDP and final sales, which are not directly related to net investment.
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