the difference between gross and net investment is referred to as: a. personal t
ID: 1191389 • Letter: T
Question
the difference between gross and net investment is referred to as:a. personal tax b. the income earned but not received c. capital consumption allowance d. an indirect business tax e. a statistical discrepancy the difference between gross and net investment is referred to as:
a. personal tax b. the income earned but not received c. capital consumption allowance d. an indirect business tax e. a statistical discrepancy the difference between gross and net investment is referred to as:
a. personal tax b. the income earned but not received c. capital consumption allowance d. an indirect business tax e. a statistical discrepancy
Explanation / Answer
Ans=capital consumption allowance
Investment is the magnitude invested in purchasing financial assets. Investment is done to obtain a reasonable target return over certain period of term. The returns might be in the forms like an increase in the value of assets or securities. It might be a regular income from securities or assets. There are various kinds of investments such as autonomous, induced, financial, real, planned, unplanned, gross and net.
Gross investment is the magnitude invested in purchase or construction of new capital goods. Net investment is related to gross investment. It is gross investment minus the depreciation on existing capital. This depreciation is the investment which needs to be done to replace worn out assets.
Net investment = gross investment – depreciation
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