Question

A new machine with a purchase price of $109,000, with transportation costs of $12,000, installation costs of $5,000, and special acquisition fees of $6,000, would have a cost basis of

Answer 1

The machine would have a cost basis of $80,000 - $86,000. All business owners must gain profit from the products that they sell by ensuring that their capital will be returned to them. Putting such costing price gives the owner the capital gains as well as earning back the expenses that he has shelled out in order to purchase the machine to be sold in the market.