Net Investment and Depreciation

Net Investment and Depreciation - increase in the stock of...

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Net Investment and Depreciation: Capital formation is not a once for all activity. It needs to be continuously sustained and improved. This can be possible only when the stock of capital grows in size in the long run. Fresh addition made to the stock annually or from time to time is called net investment . However, total annual investment activity may not be fully realized in the form of
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Unformatted text preview: increase in the stock of capital. This is because part of the present capital is likely to depreciate. Hence, additional investment expenditure over and above depreciation charges makes for the net investment and capital formation activity....
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