Option (d) is the best choice. When gross investment is favorable, the net investment could either be favorable or adverse.
The net investment figure will be positive if the gross investment is continually greater than depreciation, demonstrating a rise in the firm's productive capacity. A persistent difference between gross investment and depreciation will result in a negative net investment, which shows a decline in the level of productivity.
The depreciation of capital assets that takes place gradually over time is the only distinction between gross and net investment. Depreciation is a component of both gross and net investments, however, it is not a component of net investments. As a result, net investment can equal gross investment if depreciation is subtracted.
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