During 2016,Williams Company Purchases and Places in Service Office Equipment

question 58

Multiple Choice

During 2016,Williams Company purchases and places in service office equipment with a cost of $40,000.The equipment is 7-year MACRS property.What is its 2016 depreciation deduction for purposes of the alternative minimum tax?

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

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Definitions:

Short-Run Cost Curve

A curve that shows how production costs change as output is increased or decreased, assuming some inputs are fixed.

Profit Maximizing

The process of adjusting production and sale strategies to achieve the maximum possible profit.

Perfectly Competitive

A market structure characterized by a large number of small firms, identical products sold by all firms, no barriers to entry or exit, and perfect information among buyers and sellers.

Purification Costs

The expenditures involved in the process of removing impurities or contaminants from a substance, often related to environmental procedures or manufacturing processes.