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Problem 1: Drew is a contractor who has just purchased a tractor for use in his business. Drew paid $25,000 plus $1,250 in sales tax, and $1,000 in freight and set-up charges for the tractor.The local municipality also imposes an annual personal property tax of $500. The tractor has an expected useful life of 5 years. What is Drew's basis in the tractor for depreciation purposes?
A. $25,000B. $26,000C. $26,250D. $27,250E. $27,750
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