The Allied Mining Company Begins This Year with Capital Equal

question 76

Multiple Choice

The Allied Mining Company begins this year with capital equal to $250,000. During the year the firm depreciates $150,000 worth of its capital and ends the year with capital equal to $250,000. Which statement correctly summarises Allied Mining Company's investment?

• A) Allied Moving Company made net investment of $150,000 during the year.
• B) Allied Moving Company made no net investment during the year.
• C) Allied Moving Company made no capital investment during the year.
• D) Allied Moving Company made no gross investment during the year.
• E) Allied Moving Company made gross investment of $250,000 during the year.

---

Definitions:

Restrictive Policy

Measures taken by a government or financial institution to limit borrowing and spending in an attempt to curb inflation or stabilize the economy.

Neutral Policy

A stance or policy adopted by an organization or government that is neither supportive nor against a particular issue, aiming for a balanced approach.

Accounts Payable

Liabilities owed by a business to its creditors for purchases or services rendered that are expected to be paid off within a year.

Inventory Reduction

A strategy to decrease the amount of inventory that a company holds in order to improve cash flow or reduce storage costs.