At the beginning of the year, Tom's Tubes had a capital stock of 5 tube inflating machines. During the year, Tom scrapped 2 old machines and purchased 3 new machines. Tom's net investment for the year totaled

Question

Quizplus · Accepted Answer

Net investment is calculated as the change in the capital stock. Tom started with 5 machines, scrapped 2, and purchased 3 new ones, resulting in a net increase of 1 machine (5 - 2 + 3 = 6; 6 - 5 = 1).

At the Beginning of the Year, Tom's Tubes Had a Capital