Phyllis Purchased $8,000 of Specialized Audio Equipment That She Uses

question 45

Short Answer

Phyllis purchased $8,000 of specialized audio equipment that she uses in her business regularly. Occasionally, she uses the equipment for personal use. During the first year, Phyllis used the equipment for business use 70 percent of the time; however, during the current (second) year the business use fell to 40 percent. Assume that the equipment is seven-year MACRS property and is under the half-year convention. Assume the ADS recovery period is 10 years. What is the depreciation allowance for the current year, rounded to the nearest whole number?

Grasp the principles of the net present value method and its use in comparing different investment projects.

Learn how to calculate and interpret the internal rate of return and its implications on investment attractiveness.

Understand the cash payback period and its usage in assessing investment recovery times.

Recognize the impact of the time value of money on capital budgeting techniques.

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Definitions:

β-carotene

β-carotene is a strongly colored red-orange pigment abundant in plants and fruits, a precursor of vitamin A, and an antioxidant.

Conjugated

Refers to a system in organic chemistry where alternating single and multiple bonds result in enhanced stability and unique reactivity.

Carbocation Intermediate

A positively charged carbon ion, often found as a reactive intermediate in organic reactions, characterized by a carbon atom having only six electrons in its valence shell.

Resonance Contributors

Describes the various Lewis structures that represent a molecule's bonding and electron arrangement, highlighting how electrons can delocalize across the molecule.