Use the Following Information for Questions 115 and 116

question 92

Multiple Choice

Use the following information for questions 115 and 116:
On January 1, 2014, Garrett Company purchased a machine costing $250,000. The machine is in the MACRS 5-year recovery class for tax purposes and has an estimated $50,000 salvage value at the end of its economic life.
-Assuming the company uses the general MACRS approach, the amount of MACRS deduction for tax purposes for the year 2014 is

• A) $50,000.
• B) $100,000.
• C) $80,000.
• D) $40,000.

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Definitions:

David Ricardo

An influential British economist known for developing the comparative advantage theory, which explains how nations can gain from trade by specializing in producing goods for which they have a lower opportunity cost relative to other countries.

Tenant Farmers

Individuals who rent land to farm from a landlord.

Economic Rent

Extra income earned by a factor of production (like land or labor) due to its relatively fixed supply, exceeding what is economically necessary to bring it into use.

Landowners

Individuals or entities that hold legal title or ownership of land.