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The value of the gross investment in order to accommodate regular wear and tear of capital is called:
Question

The value of the gross investment in order to accommodate regular wear and tear of capital is called:

A.

debt

B.

deficit

C.

new investment

D.

depreciation

Correct option is D

CORRECT OPTION - D

  • Depreciation - Depreciation is the process by which the value of an asset decreases over time due to factors such as wear and tear, obsolescence, or age. It is an accounting method used to allocate the cost of a tangible asset over its useful life, reflecting its decreasing value and helping businesses spread the expense of an asset over several years.
  • Debt  -Debt refers to an amount of money that is borrowed by an individual, organization, or government, which is expected to be paid back with interest over time. It can take various forms, such as loans, bonds, or credit, and is typically used to finance operations, investments, or expenditures.
  • Deficit - Deficit refers to the shortfall or excess of expenses over income, indicating that a person, organization, or government is spending more than it is earning or receiving. It is commonly used in the context of government budgets (budget deficit) or trade balances (trade deficit), where the expenditure exceeds the revenue or imports exceed exports
  • New investment  - New investment refers to the allocation of funds or capital into new assets, projects, or ventures aimed at increasing production capacity, expanding business operations, or generating future returns. This can include purchasing new machinery, developing infrastructure, or investing in research and development to drive growth.

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