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:

Equality

The state or quality of being equal, especially in status, rights, or opportunities.

Men and Women

Refers to the two primary genders within the human species, each with its own biological and social attributes and roles.

California Gold Rush

A period of migration to California following the discovery of gold in 1848, significantly impacting the state's development and demographics.

1849

Refers to a specific year in the 19th century, notable for the start of the California Gold Rush in the United States.