What does Gross investment refer to (answers included)?

Gross investment refers to:

1.private investment minus public investment.
2.net investment plus replacement investment.
3.net investment after it has been "inflated" for changes in the price level.
4.net investment plus net exports.

My book says it is Net investment + depreciation. Somehow that is not included in the answers...

Thanks!

Here's your answer...

2. net investment plus replacement investment

When item depreciates, over long term you will replace it and therefore total depreciation equals replacement cost, or replacement investment in this case. This assumes you are adhering to an unchanging and sustainable business model. Typical example is a single machine unit on a production line ... it depreciates to $0 in value and is basically worthless, you replace it with a new one at the same price of the original one.

Tags

　　Raise Capital 　　Property Investment 　　Profitable Investments 　　Private Investment 　　Private Equity 　　Private Capital 　　Personal Investment 　　Pension Fund

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