This year Pizza Hut makes a total investment of $1.3 billion in new stores. Its depreciation in this year is $300 million. Pizza Hut's gross investment is ________ and its net investment is ________.
A) $1.3 billion; $1.6 billion
B) $1.0 billion; $1.3 billion
C) $1.3 billion; $1.0 billion
D) $1.0 billion; $0.7 billion

Question

Quizplus · Accepted Answer

Gross investment refers to the total amount spent on new capital, which is $1.3 billion. Net investment is calculated by subtracting depreciation from the gross investment, which gives $1.3 billion - $300 million = $1.0 billion.

This Year Pizza Hut Makes a Total Investment of $1