In March of the Current Year,Marcus Began Investigating the Possibility

question 92

Multiple Choice

In March of the current year,Marcus began investigating the possibility of opening a specialty clothing store.From March through June,he spent $2,300 on a market survey,$2,700 in consulting fees to find the best location and $3,600 in professional fees setting up an accounting and inventory system.Although he had never run his own business before,on August 1 he opened his doors for business.What is the maximum amount of deduction for the current year attributable to these expenditures?

• A)$0
• B)$5,000
• C)$5,100
• D)$8,600

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Definitions:

Managerial Options

Financial incentives given to managers and executives, often in the form of stock options, to align their interests with those of the shareholders by motivating them to enhance the company's value.

Real Options

The flexibility to make strategic business decisions, such as deferring, abandoning, expanding, or contracting a project based on new information or market changes.

Exercised Option

An exercised option refers to the act of utilizing the right to buy or sell the underlying asset as specified in the options contract.

Terminating Project

Refers to the process of concluding or ending a project before its natural completion, often due to failure to meet objectives, financial constraints, or external factors.