During 2017,Duncan Company Purchases and Places in Service Office Equipment

question 33

Multiple Choice

During 2017,Duncan Company purchases and places in service office equipment with a cost of $40,000.The equipment is 7-year MACRS property with an ADS recovery period of 10 years.Duncan desires to avoid the AMT.What is its minimum 2017 depreciation deduction?

• A)$2,000
• B)$2,857
• C)$3,000
• D)$4,000
• E)$5,714

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Definitions:

Patents

Legal documents granted by the government giving an inventor exclusive rights to manufacture, use, or sell an invention for a certain number of years.

Innovation Incentives

Mechanisms or policies designed to encourage the development and implementation of new ideas, products, or methodologies.

Monopoly Power

The degree of control a company has over a market, enabling it to set prices or exclude competition.

Production Costs

The total expenses incurred in the manufacturing of a product or the providing of a service, including raw materials, labor, and overheads.