Question :
21) If an economy’s depreciation greater than its gross investment, : 1240429
21) If an economy’s depreciation is greater than its gross investment, then
A) net investment is positive and saving is negative.
B) the economy’s capital stock decreases.
C) net investment is positive and saving is positive.
D) net investment is negative and saving is negative.
E) net investment must equal saving.
22) The Zonamo company produces waste disposal machines and sells them to militaries all over the world. The company started last year with $10 million of capital on hand and invested $15 million in new capital throughout the year. At the end of the year, the company’s capital stock was $17 million. Hence, for the year, depreciation equaled ________ and net investment equaled ________.
A) $8 million; $7 million
B) $7 million; $8 million
C) $25 million; $5 million
D) $5 million; $5 million
E) $8 million; $15 million
23) The local Allied Moving 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 summarizes Allied Moving Company’s investment?
A) Allied Moving Company made no capital investment during the year.
B) Allied Moving Company made no gross investment during the year.
C) Allied Moving Company made no net investment during the year.
D) Allied Moving Company made net investment of $150,000 during the year.
E) Allied Moving Company made gross investment of $250,000 during the year.
24) Bill’s Lawn service starts the year with 20 lawn mowers. During the year, 3 mowers break and are not worth fixing. Bill also expands his business and buys 10 more mowers. Bill’s net investment is ________ mowers.
A) 10
B) 13
C) 7
D) 27
E) 20
25) Bill’s Lawn service starts the year with 20 lawn mowers. During the year, 3 mowers break and are not worth fixing. Bill also expands his business and buys 10 more mowers. Bill’s capital at the end of the year is ________ mowers.
A) 20
B) 30
C) 27
D) 33
E) 10
26) At the beginning of the year, AAA-1 Towing owns trucks and buildings for a total value of $1 million. During the year, it invests $250,000 to replace towing trucks worth $230,000 destroyed in a flood and to cover $50,000 worth of depreciation. AAA-1 Towing’s net investment was
A) $200,000.
B) $20,000.
C) $280,000.
D) -$30,000.
E) $250,000.
27) At the beginning of the year, AAA-1 Towing owns trucks and buildings for a total value of $1 million. During the year, it invests $250,000 to replace towing trucks worth $230,000 destroyed in a flood and to cover $50,000 worth of depreciation. AAA-1 Towing’s capital stock at the end of the year was
A) $970,000.
B) $1,250,000.
C) $950,000.
D) $1,280,000.
E) $1,020,000.
28) On January 1, Rick’s Photo owned $50,000 of equipment. During the year, the value of the equipment fell by $10,000, plus Rick bought $25,000 in new equipment. Rick’s company experienced
A) net investment of $15,000.
B) an increase in financial capital of $65,000.
C) a decrease in financial capital of $15,000.
D) depreciation of $15,000.
E) gross investment of $50,000.
29) On January 1, Rick’s Photo owned $50,000 of equipment. During the year, the value of the equipment fell by $10,000, plus Rick bought $25,000 in new equipment. Rick’s company experienced ________ because ________.
A) net investment of $15,000; net investment equals gross investment minus depreciation
B) gross investment of $15,000; gross investment equals net investment minus depreciation
C) gross investment of $40,000; gross investment equals net investment plus depreciation
D) net investment of $15,000; net investment equals beginning year financial capital minus depreciations and investment
E) depreciation of $15,000; depreciation equals investment in new products minus loss in values
30) On January 1, Derek had CD recording devices valued at $30,000. During the year, the value of Derek’s devices depreciated by $20,000. He spent $30,000 on new devices. Derek’s net investment was ________ and at the end of the year Derek had capital valued at ________.
A) $10,000; $40,000
B) $30,000; $40,000
C) $20,000; $60,000
D) $40,000; $70,000
E) $10,000; $60,000
