net investment is equal to
Answers
Answer:
Net investment is the total amount of money that a company spends on capital assets, minus the cost of the depreciation of those assets.
Hope Helps ❤️
Answer:
Concept:
Net investment is the total amount of funds that are spent by a company to purchase capital assets, less the associated depreciation of the assets. The net investment figure provides an accurate depiction of how much is spent on tangible assets such as property, plant and equipment (PP&E) and other capital assets.
Net Investment = Capital Expenditures - Depreciation
Find:
net investment is equal to
Given:
net investment is equal to
Explanation:
Net investment is the total amount of money that a company spends on capital assets, minus the cost of the depreciation of those assets. This figure provides a sense of the real expenditure on durable goods such as plants, equipment, and software that are being used in the company's operations.
The net investment value is calculated by subtracting depreciation expenses from gross capital expenditures over a period of time.
Net Investment = Capital Expenditures - Depreciation
• Gross investment is the purchase of fixed assets and unsold stock during an accounting cycle.
• Depreciation is the loss of value over time for the fixed assets through normal use and wear and tear.
• Once depreciation is deducted from the gross investment, the remaining amount is the net investment. Net investment can also be thought of as the actual investment in capital assets.
As mentioned, net investment is calculated by subtracting depreciation from gross capital expenditures. Capital assets that are purchased usually deteriorate over their useful lives. The deterioration of assets comes from several factors, such as:
- Breakdown of the assets
- Obsolescence
- Repair maintenance
#SPJ2