Question

capital gains are:
increases in the flow of investment
increases in the flow of saving assets
additions to plant and equipment.
increases in the value of existing assets.
decreases in the value of existing

Explanation:

To determine the correct option for the definition of capital gains, we analyze each choice:

• "Increases in the flow of investment" is incorrect as capital gains are about asset value, not investment flow.
• "Increases in the flow of saving assets" is incorrect; capital gains relate to asset value appreciation, not saving asset flow.
• "Additions to plant and equipment" refers to capital investment (like capital expenditure), not capital gains.
• "Increases in the value of existing assets" matches the definition of capital gains, which is the profit from an asset's value increase over time.
• The last option ("decreases...") is incorrect as capital gains are increases, not decreases.

Answer:

D. increases in the value of existing assets.