The consumption of fixed capital is also known as _________.

Question

Question

This question was previously asked in

SSC CGL 2023 Tier-I Official Paper (Held On: 14 Jul 2023 Shift 1)

Answer 1

The correct answer is depreciation.Key Points

Depreciation:-
- The consumption of fixed capital is also known as "depreciation":
- Consumption of fixed capital refers to the reduction in the value of a fixed asset due to wear and tear, obsolescence, or other factors.
- Depreciation is the accounting method used to allocate the cost of a fixed asset over its useful life, reflecting the consumption of fixed capital over time.
- Depreciation can be calculated using different methods, such as straight-line depreciation, declining balance depreciation, or sum-of-the-years' digits depreciation.

Additional Information

Net investment:-
- It refers to the difference between gross investment and depreciation, representing the actual increase in the stock of fixed assets.
Appreciation:-
- It refers to the increase in the value of an asset over time, which is the opposite of depreciation.
Gross investment:-
- It refers to the total amount of investment in fixed assets, including both the increase in the stock of assets and the replacement of existing assets.