Joe Started a New Business This Year

question 71

Multiple Choice

Joe started a new business this year.He had purchased a computer two years ago for $4,000 and decided to use it in his business until he could afford a new system.He could purchase a new computer with the same specifications for $1,800, but his used computer is worth only $1,100.What is his computer's basis for depreciation?

• A)$1,100
• B)$1,800
• C)$4,000
• D)The computer cannot be depreciated because it was a personal asset.

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Definitions:

Production Time

The total time required to manufacture an item, including processing, waiting, and assembly times.

Regular Machines

Machines that perform operations under a set of defined rules and conditions without the need for human intervention, typically used in manufacturing and automation.

Objective Function

A mathematical function representing the goal of an optimization problem, typically minimized or maximized.

Total Cost

Total cost is the sum of all expenses incurred in the production of goods or services, including fixed and variable costs.