Alfred Uses His Personal Automobile in His Business of Selling

question 85

Multiple Choice

Alfred uses his personal automobile in his business of selling party supplies to local businesses.He bought a new car in 2016 and drove it a total of 20,000 miles of which 2,000 miles were for commuting and other personal uses.Actual gas,oil,repairs,licensing,insurance,and depreciation totaled $11,000 for 2016.Actual parking expenses for business were $200.What is the maximum amount Alfred can deduct for 2016?

• A)$9,750
• B)$10,100
• C)$10,170
• D)$10,550
• E)$11,200

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Definitions:

Internal Rate Of Return

A metric used in financial analysis to estimate the profitability of potential investments, calculated as the rate of return that makes the net present value of all cash flows equal to zero.

Minimum Discount Rate

The lowest rate at which future cash flows are discounted to determine their present value.

Project

A deliberate arrangement of tasks that are interconnected, aimed to be finalized within a designated time frame and under particular cost and constraint conditions.

Accounting Rate

Typically referred to as the rate of return, it measures the profitability of investments or projects based on accounting information, rather than the current market value.