If Depreciation Is Less Than Gross Investment, Then Net Investment

question 207

Multiple Choice

If depreciation is less than gross investment, then net investment is

• A) positive.
• B) negative.
• C) zero.
• D) This situation could never occur because it is impossible for depreciation to be less than gross investment.

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Definitions:

Cumulative

Refers to the aggregate amount that has been gathered or accumulated over time.

Par Value

A nominal or face value assigned to a share of stock or a bond by the issuing company, often unrelated to its market value.

Common Stock

A type of security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Partnership

A Partnership is a legal form of business operation between two or more individuals who share management and profits.