Calculate Michael’s gross investment, depreciation , and net investment

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 7, Problem 1SPA

To determine

Calculate Michael’s gross investment, depreciation, and net investment

Expert Solution & Answer

Explanation of Solution

The total amount of money spent on the new capital is gross investment. During the period of 2015, Michael has purchased $500,000 of new servers. Thus, the gross investment in 2018 is $500,000. At the same time the market value of older servers falls by $100,000. That means the depreciation of the older servers is $100,000. Since, the gross investment is $500,000 and the depreciation is $100,000, the net investment can be calculated as follows.

Net investment=Gross investment−Depreciation=500,000−100,000=400,000

Thus, Michael’s net investment is equal to $400,000.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 2

Question

Chapter 7, Problem 1SPA

To determine

Calculate Michael’s gross investment, depreciation, and net investment

Expert Solution & Answer

Explanation of Solution

The total amount of money spent on the new capital is gross investment. During the period of 2015, Michael has purchased $500,000 of new servers. Thus, the gross investment in 2018 is $500,000. At the same time the market value of older servers falls by $100,000. That means the depreciation of the older servers is $100,000. Since, the gross investment is $500,000 and the depreciation is $100,000, the net investment can be calculated as follows.

Net investment=Gross investment−Depreciation=500,000−100,000=400,000

Thus, Michael’s net investment is equal to $400,000.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 7, Problem 1SPA

To determine

Calculate Michael’s gross investment, depreciation, and net investment

Expert Solution & Answer

Explanation of Solution

The total amount of money spent on the new capital is gross investment. During the period of 2015, Michael has purchased $500,000 of new servers. Thus, the gross investment in 2018 is $500,000. At the same time the market value of older servers falls by $100,000. That means the depreciation of the older servers is $100,000. Since, the gross investment is $500,000 and the depreciation is $100,000, the net investment can be calculated as follows.

Net investment=Gross investment−Depreciation=500,000−100,000=400,000

Thus, Michael’s net investment is equal to $400,000.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 7, Problem 1SPA

To determine

Calculate Michael’s gross investment, depreciation, and net investment

Expert Solution & Answer

Explanation of Solution

The total amount of money spent on the new capital is gross investment. During the period of 2015, Michael has purchased $500,000 of new servers. Thus, the gross investment in 2018 is $500,000. At the same time the market value of older servers falls by $100,000. That means the depreciation of the older servers is $100,000. Since, the gross investment is $500,000 and the depreciation is $100,000, the net investment can be calculated as follows.

Net investment=Gross investment−Depreciation=500,000−100,000=400,000

Thus, Michael’s net investment is equal to $400,000.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 7, Problem 1SPA

To determine

Calculate Michael’s gross investment, depreciation, and net investment

Expert Solution & Answer

Explanation of Solution

The total amount of money spent on the new capital is gross investment. During the period of 2015, Michael has purchased $500,000 of new servers. Thus, the gross investment in 2018 is $500,000. At the same time the market value of older servers falls by $100,000. That means the depreciation of the older servers is $100,000. Since, the gross investment is $500,000 and the depreciation is $100,000, the net investment can be calculated as follows.

Net investment=Gross investment−Depreciation=500,000−100,000=400,000

Thus, Michael’s net investment is equal to $400,000.

Answer 6

Chapter 7, Problem 1SPA

To determine

Calculate Michael’s gross investment, depreciation, and net investment

Expert Solution & Answer

Explanation of Solution

The total amount of money spent on the new capital is gross investment. During the period of 2015, Michael has purchased $500,000 of new servers. Thus, the gross investment in 2018 is $500,000. At the same time the market value of older servers falls by $100,000. That means the depreciation of the older servers is $100,000. Since, the gross investment is $500,000 and the depreciation is $100,000, the net investment can be calculated as follows.

Net investment=Gross investment−Depreciation=500,000−100,000=400,000

Thus, Michael’s net investment is equal to $400,000.

Answer 7

Chapter 7, Problem 1SPA

To determine

Calculate Michael’s gross investment, depreciation, and net investment

Answer 8

Expert Solution & Answer

Explanation of Solution

The total amount of money spent on the new capital is gross investment. During the period of 2015, Michael has purchased $500,000 of new servers. Thus, the gross investment in 2018 is $500,000. At the same time the market value of older servers falls by $100,000. That means the depreciation of the older servers is $100,000. Since, the gross investment is $500,000 and the depreciation is $100,000, the net investment can be calculated as follows.

Net investment=Gross investment−Depreciation=500,000−100,000=400,000