In January 2014, Tim's Gyms, Inc. owned machines valued at $1 million. During the year, the market value of the machines fell by 10 percent. During 2014, Tim spent $200,000 on new machines. During 2014, Tim's net investment was
A)$1 million.
B)$300,000.
C)$200,000.
D)$100,000.
E)$1.1 million.

Question

Quizplus · Accepted Answer

The market value of the machines decreased by 10 percent, which means the current market value of the machines is $900,000. Tim purchased new machines worth $200,000. Therefore, the net investment in machines during 2014 was $200,000 - $100,000 = $100,000.