Question

A new machine with a purchase price of $90,698, transportation costs of $7,024, installation cost of $6,507, and special acquisition fees of $2,747 would have a cost basis of

A) $97,698
B) $106,976
C) $99,926
D) $107,976

Answer 1

The cost basis of the new machine is calculated by summing the purchase price, transportation costs, installation costs, and special acquisition fees, which total $106,976. Therefore, the correct answer is B) $106,976.

Step-by-step explanation:

To calculate the cost basis of a new machine, we need to add the purchase price, transportation costs, installation costs, and any special acquisition fees. Here is the breakdown:

• Purchase price: $90,698
• Transportation costs: $7,024
• Installation cost: $6,507
• Special acquisition fees: $2,747

Now, let's add these amounts together:

$90,698 (Purchase price)

+ $7,024 (Transportation costs)

+ $6,507 (Installation cost)

+ $2,747 (Special acquisition fees)
Total cost basis: $106,976

The correct answer is B) $106,976.