Difference between gross investment and net investment
Answers
Answer:
Gross investment refers to the amount invested in purchase or construction of new capital goods. Net investment is also related to gross investment. ... Thus, gross investment is the total amount spent on goods in order to produce other goods and services, whereas net investment is the increase in productive stock.
Answer:
Depreciation on the capital is included in gross investment, while in net investment it is deducted.
Explanation:
Gross investment can be defined as the expenditure on the purchase of capital assets over a specified period. It is the amount which is spent on acquiring new capital inputs. While, the net investment is also related to gross investment, it excludes the depreciation of capital. depreciation means decline in the value of asset due to the wear and tear of capital over time.