Depreciation can be determined indirectly by:

Question

Quizplus · Accepted Answer

Depreciation can be determined indirectly by subtracting net investment from gross investment. This is because gross investment includes both the amount spent on new capital goods and the replacement of depreciated capital goods, and net investment only accounts for the amount spent on new capital goods. Therefore, the difference between gross and net investment represents the amount spent on replacing depreciated capital goods, or depreciation.

Depreciation Can Be Determined Indirectly By