What Is the Difference Between Gross Investment and Net Investment

question 43

Multiple Choice

What is the difference between gross investment and net investment?

• A)net investment = gross investment minus taxes
• B)net investment = gross investment minus net factor payments
• C)net investment = gross investment minus inventory accumulation
• D)net investment = gross investment minus depreciation

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Definitions:

Compounded Monthly

A method of calculating interest where the interest earned each month is added to the principal, thus earning interest in subsequent months.

RRSP

Registered Retirement Savings Plan, a Canadian account for holding savings and investment assets with tax benefits for retirement.

Deposits

Funds placed into an account at a financial institution for safekeeping or to earn interest.

Compounded Monthly

An interest calculation method where interest is added to the principal balance on a monthly basis, resulting in interest being earned on top of interest.