The Local Printing Company Purchases a New Copy Machine for $150,000

question 81

Multiple Choice

The local printing company purchases a new copy machine for $150,000 that reduces the cost of making a color copy by ten cents a copy.The copy machine can be depreciated straight line for seven years and the company is in the 28 percent income tax bracket.The owner believes he can sell the machine for $10,000 at the end of seven years.What is this company's total tax savings due to depreciation?

• A)$39,200
• B)$2,800
• C)$5,600
• D)$42,000

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Definitions:

Competition

is the rivalry among sellers in the same market to attract customers by offering better terms, quality, or services.

Freedom of Enterprise

Freedom of enterprise is the principle that individuals or businesses have the right to own, operate, and profit from their own ventures in an open market with minimal government interference.

Division of Labor

The assignment of different parts of a manufacturing process or task to different people in order to improve efficiency.

Labor Markets

The supply of available workers in relation to available work, and the dynamics of wages, employment, and labor demand.