Definition of Net investment:
Net investment is the total amount of money that a company spends on capital assets, minus the cost of the depreciation of those assets. This figure provides a sense of the real expenditure on durable goods such as plants, equipment, and software that are being used in the company's operations.
Capital assets lose value over time due to wear and tear and obsolescence. Therefore, subtracting depreciation from gross capital expenditure (CAPEX) provides a more accurate picture of their actual value.
Accounting: Amount invested (capital expenditure) in a given period less allowance for capital depreciation during the same period.
Economics: Change in the total capital stock in an economy computed by deducting capital consumption from the gross expenditure on capital formation.
How to use Net investment in a sentence?
- If net investment is negative, its capacity is shrinking.
- If net investment is positive, the company is expanding its capacity.
- Though Mr. Wonka would never recover his net investment , he always held the happiness he felt doing something he loved was a sufficient reward.
- When looking at a companys viability as a place to invest, look for the calculation of their net investment to determine the real health of the company finacial picture.
- Net investment indicates how much a company is spending to maintain and improve its operations.
- Our net investment was quite a lot and I knew that it was quite a risk, but I figured it was worth taking.
Meaning of Net investment & Net investment Definition