During the Year, Sophie (A Self-Employed Marketing Consultant) Went from Omaha

question 28

Multiple Choice

During the year, Sophie (a self-employed marketing consultant) went from Omaha to Lima, Peru, on business. She spent four days on business, two days on travel, and four days on vacation. Disregarding the vacation costs, Sophie's expenses are: $$\begin{array} { l r } \text { Airfare } & \$ 3,000 \\\text { Lodging } & 800 \\\text { Meals } & 600 \\\text { Entertainment } & 400\end{array}$$ Sophie's deductible expenses are:

• A) $4,300.
• B) $2,900.
• C) $2,800.
• D) $2,500.
• E) None of these.

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Definitions:

Useful Life

An estimate of the duration over which an asset is expected to be economically viable and operational in a business.

Average Rate of Return

A financial ratio showing the average annual return of an investment over its lifetime, calculated as the total expected return divided by the initial cost of the investment.

Total Income

The sum of all revenue and gains for an entity over a specified period of time.

Present Value

The present value of a future amount of money or a series of future cash flows, discounted at a specific rate of return.