What Is the Second-Year Depreciation of a Rent-To-Own Property That

question 18

Multiple Choice

What is the second-year depreciation of a rent-to-own property that originally cost $250,000 and has a salvage value of $25,000? Use the MACRS method.

• A) $3,702.50
• B) $11,112.50
• C) $37,025
• D) $111,125

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing to pay for a good or service and the total amount that they actually pay.

Priced At

The specified cost at which a good or service is offered for sale in the market.

Surplus

The amount by which the quantity supplied of a product exceeds the quantity demanded at a specific (above-equilibrium) price.

Consumer Surplus

The gap between what consumers are prepared and capable of paying for a product or service and the actual amount they end up paying.