Question

​Michael, an Internet service​ provider, bought an existing business worth ​$200 comma 000 on December​ 31, 2017. During 2018​, his business grew and he bought ​$400 comma 000 of new servers. The market value of his older servers fell by ​$150 comma 000. What was​ Michael's gross​ investment, depreciation and net investment during 2018​?

Answer 1

Step-by-step explanation:

Data provided in the question

New servers bought price = $400,000

The market value of older servers fell = $150,000

Bought an existing business = $200,000

So, the computations are as follows

Gross investment = New servers bought price

= $400,000

Depreciation = The market value of older servers fell

= $150,000

So, the net investment is

= Gross investment - depreciation

= $400,000 - $150,000

= $250,000