David Acquired an Automobile for $30,000 for Use in His

question 19

Multiple Choice

David acquired an automobile for $30,000 for use in his unincorporated business at the beginning of 2016 and used the standard mileage rate method in 2016.He plans to switch to the actual expense method for 2017.The automobile was used 25,000 miles in 2016.What is the amount of the adjusted basis of the automobile for purposes of computing depreciation in 2017?

• A)$30,000
• B)$15,625
• C)$24,000
• D)$20,000

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Definitions:

Concentration Ratio

A measure of the total output produced in an industry by a given number of firms, usually the largest in the industry, indicating the degree of market concentration.

Herfindahl-Hirschman Index

A measure used to calculate the level of competition within an industry, represented by the sum of the squares of the market shares of all firms in the industry.

Japanese Companies

Entities based in Japan, engaged in commercial, industrial, or professional activities.

Oligopolized Industry

A market structure characterized by a few firms that have significant control over market prices and competition.