ABC Already Spent $85,000 on a Feasibility Study for a Machine

question 25

Multiple Choice

ABC already spent $85,000 on a feasibility study for a machine that will produce a new product. The machine will cost $2,575,000. Required modifications will cost $375,000. ABC will need to invest $75,000 for additional inventory. The machine has an IRS approved useful life of 7 years; it is presumed to have no salvage value. It will only be operated for 3 years, after which it will be sold for $600,000. What is the depreciable cost basis of the machine?

• A) $3,025,000
• B) $2,950,000
• C) $2,575,000
• D) $2,350,000

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Definitions:

Housekeeping Genes

These are genes that are constantly active in the cell to maintain basic functions and cellular metabolism.

Feedback Inhibition

A process where the end product of a metabolic pathway acts as an inhibitor of an enzyme within that pathway, regulating its own production.

Posttranslational Control

Regulation of gene expression that controls activity or functions of proteins, usually by phosphorylation or other chemical modifications of the protein. Compare with transcriptional-level control, translational-level control, and posttranscriptional control.

Translational Control

The regulation of protein synthesis in a cell by various mechanisms that act on the process of translating RNA into protein.