At the start of the year, your firm's capital stock equaled $10 million, and at the end of the year it equaled $15 million. The

Question

2 years ago

11

At the start of the year, your firm's capital stock equaled $10 million, and at the end of the year it equaled $15 million. The

average depreciation rate on your capital stock is 20%. Net investment during the year equaled:________
a. $7 million
b. $4 million
c. $5 million
d. $3 million

Business

1 answer:

hammer [34] · Answer 1 · 2022-12-08T21:29:42+03:00

Answer:

c. $5million

Explanation:

Net investment = Gross investment - Depreciation

Also, Net investment equals investment at the beginning of the year minus investment at the end of the year

Net investment = $15million - $10million

Net investment = $5million

Therefore, net investment during the year equals $5million