How to Find the Net Investment

1). Find out the cost of the item being purchased. Assume the cost of a new machine is $20,000.
2). Add any additional costs required to obtain and install the machine. Assume there is an 8 percent sales tax ($20,000 x 0.08 = $1,600), and it costs $1,200 to install the machine. The additional costs are $2,800 ($1,600 + $1,200).
3). Add the additional costs to the initial costs: $20,000 + $2,800 = $22,800.
4). Determine the depreciation value of the machine. Assume the machine has a life expectancy of 10 years, divide the total cost by 10: $22,800 / 10 = $2,280.
5). Subtract the depreciation value from the total costs: $22,800 - $2,280 = $20,520. This is the net investment.