On January 1 of the Current Year,Dentux Corp

question 74

Multiple Choice

On January 1 of the current year,Dentux Corp.purchases a patent from another corporation for $600,000.The patent has a remaining life of 10 years.The patent is the only asset purchased from that corporation.Also on January 1,Dentux purchases all of the assets of Fenton Corp.Included in the Fenton assets acquired is a patent worth $300,000 that has a 10-year remaining life.What is the allowable amortization deduction on the two patents?

• A)$60,000
• B)$90,000
• C)$80,000
• D)$160,000

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Definitions:

Profit-Maximizing Entrepreneur

An entrepreneur who aims to achieve the highest possible profit through business operations.

Interest Rate

The percentage charged by lenders to borrowers for the use of money, or the rate earned on investments, reflecting the cost of borrowing or the yield on investments.

Investment Project

A project involving the expenditure of capital in order to generate returns or benefits over time.

Present Discounted Value

The current value of a future amount of money or stream of cash flows, adjusted for the time value of money.