S Sold a Business Microcomputer for $2,000 That She Had

question 46

Multiple Choice

S sold a business microcomputer for $2,000 that she had purchased for $2,500 several months earlier.Assume the depreciation deducted under MACRS on the computer for the actual holding period was $1,795.What is the amount of S's gain recognized on this sale?

• A)$0
• B)$500
• C)$1,795
• D)$1,295

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Definitions:

Outlay

The total amount of money spent on a particular purchase or project.

IRR

Internal Rate of Return; a metric used in financial analysis to estimate the profitability of potential investments.

Cost of Capital

The rate of return that a company must pay on its investment and financing activities to maintain its current market value.

Cash Inflows

Money received by a business or organization through its activities, such as sales revenue, investment income, or financing.