Maxcom Inc

question 4

Multiple Choice

Maxcom Inc. purchased 15 passenger automobiles for use by its sales force. Which of the following statements is true?

• A) Maxcom must use the straight-line method to depreciate the passenger automobiles for tax purposes.
• B) Maxcom's annual tax depreciation on the passenger automobiles may be limited to an amount less than MACRS depreciation.
• C) Maxcom's annual tax depreciation on the passenger automobiles is computed under MACRS.
• D) Even though Maxcom purchased the automobiles for business use, Maxcom is not allowed any tax depreciation for the automobiles.

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Definitions:

Limited Distribution Channels

A situation where a product or service has a small number of outlets or platforms through which it can reach customers.

Industry Analysis

An examination of the economic and market forces that affect the competitiveness within an industry.

High Exit Barriers

Factors that make it difficult and costly for a company to leave a market or industry.

Undifferentiated Products

Products that are essentially identical in features and quality to those offered by competitors, making differentiation through marketing crucial.