On 30 September of the current income tax year, Yummy Rolls Ltd purchased a second-hand baker s oven for its factory. The oven cost $35 000. Transportation costs to get the oven to the factory amounted to $800 and it cost a further $200 for transit insurance.

While the effective life of the oven is seven years, it had to have initial repairs costing $2,000 to get the machine in an operational condition for Yummy Rolls Ltd. The oven was not installed ready for use until 1 November of the current income tax year.

Yummy Rolls Ltd has an average annual turnover of $10 million for the last three years and this is expected to continue in the future.

In relation to all the expenditure amounts above, the maximum amount that Yummy Rolls Ltd can claim as a deduction on the oven for the current income tax year is approximately:

$6,800.

$7,200.

$10,900.

$6,600.

$3,600.