Michael, an Internet service provider, bought an existing business worth $200 comma 000 on December 31, 2017. During 2018, his business grew and he bought $400 comma 000 of new servers. The market value of his older servers fell by $150 comma 000. What was Michael's gross investment, depreciation and net investment during 2018?

Explanation:

Data provided in the question

New servers bought price = $400,000

The market value of older servers fell = $150,000

Bought an existing business = $200,000

So, the computations are as follows

Gross investment =  New servers bought price

                              = $400,000

Depreciation = The market value of older servers fell

                      = $150,000

So, the net investment is

= Gross investment - depreciation

= $400,000 - $150,000

= $250,000

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