Abco Pty Ltd Is Considering the Purchase of $60 000

question 34

Multiple Choice

Abco Pty Ltd is considering the purchase of $60 000 in tools.The manager estimates that the tools will generate $25 000 in savings during each year of a four-year life.The tools will be depreciated based on the following schedule.The expected tax rate is 30 per cent.What is the tax effect of the depreciation in year 3? (Ignore time value of money)

• A) $9000
• B) $6300
• C) $2700
• D) $1823

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Definitions:

Antidepressant Drugs

Drugs that regulate mood.

Tricyclics

A class of antidepressant medications used to treat depression and other conditions by affecting neurotransmitters in the brain.

Benzodiazepines

A class of psychoactive drugs known to act on the central nervous system, often prescribed for anxiety, seizures, and insomnia.

Tranquilizers

Depressant drugs, such as Valium and Xanax, that reduce anxiety and induce relaxation.