Question

Graphic DesignWorks purchased $15,000 worth of computers in 2005. According to the MACRS table, how much money can they deduct from their expenses in the first year?

A) $1500
B) $5000
C) $3000
D) $2000

Answer 1

According to the MACRS table, Graphic DesignWorks can deduct $3,000 from their expenses in the first year.

Step-by-step explanation:

According to the MACRS (Modified Accelerated Cost Recovery System) table, Graphic DesignWorks can deduct a certain percentage of the cost of their computers as an expense in the first year. In this case, since the computers were purchased in 2005, the applicable MACRS rate would be 20%. So, the amount of money they can deduct from their expenses in the first year would be $15,000 multiplied by 20%, which is $3,000.