In January 2008, Tim's Gyms, Inc. owned machines valued at $1 million. During the year, the market value of the equipment fell by 30 percent. During 2008, Tim spent $200,000 on new machines. During 2008, Tim's net investment totalled

Question

Quizplus · Accepted Answer

The market value of the existing equipment fell by 30%, which is a $300,000 decrease. Tim spent $200,000 on new machines, so the net investment is $200,000 - $300,000 = -$100,000. However, since the question asks for the total net investment in terms of spending, the correct answer is $200,000 spent on new machines.