The Difference Between Gross Investment and Net Investment Is

question 164

Multiple Choice

The difference between gross investment and net investment is

• A) inflation.
• B) depreciation.
• C) initial capital.
• D) consumption.

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Definitions:

Committed Fixed Costs

Expenses that a company has an obligation to pay, regardless of the level of production or sales activity, such as rent, insurance, and salaries.

One-Year

A period of time consisting of 12 consecutive months.

Sunk Cost

A cost that has already been incurred and cannot be recovered.

Contribution Format

An income statement format that separates fixed and variable costs, showing contribution margin which is sales revenue minus variable costs.