Hans Purchased a New Passenger Automobile on August 17,2016,for $30,000

question 50

Multiple Choice

Hans purchased a new passenger automobile on August 17,2016,for $30,000.During the year the car was used 40% for business and 60% for personal use.Determine his cost recovery deduction for the car for 2016.

• A)$500
• B)$1,000
• C)$1,224
• D)$1,500
• E)None of the above

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Definitions:

Discount Rate

The rate of interest utilized in the process of discounted cash flow analysis for assessing the present worth of future cash flows.

Profitability Index

A financial tool that calculates the relationship between the costs and benefits of a proposed project through its net present value.

Internal Rate Of Return

A metric used in capital budgeting to estimate the profitability of potential investments, calculating the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero.

Discount Rate

In the realm of discounted cash flow analysis, this is the interest rate used for estimating the present value of future financial inflows.