Question

During a​ year, a​ firm's gross investment is ​$2 comma 000 and net investment is ​$1 comma 600. What is the​ firm's depreciation​? The​ firm's depreciation is​ ______. A. ​$1 comma 200 B. ​$1 comma 600 C. ​$2 comma 000 D. ​$400

Answer 1

Answer:

Option (D) is correct.

Explanation:

Given that,

During a​ year,

Firm's gross investment = $2,000

Firm's net investment = $1,600

Firm's depreciation = ?

Therefore,

Gross investment = Net investment + Depreciation

$2,000 = $1,600 + Depreciation

$2,000 - $1,600 = Depreciation

$400 = Depreciation

Hence, the firm's depreciation is $400.