Hazel Purchased a New Business Asset (Five-Year Asset) on September

question 58

Multiple Choice

Hazel purchased a new business asset (five-year asset) on September 30, 2017, at a cost of $100,000. On October 4, 2017, Hazel placed the asset in service. This was the only asset Hazel placed in service in 2017. Hazel did not elect § 179 or additional first-year depreciation. On August 20, 2018, Hazel sold the asset. Determine the cost recovery for 2018 for the asset.

• A)$14,250
• B)$19,000
• C)$23,750
• D)$38,000
• E)None of the above

Recognize the role of financial markets and intermediaries in the economy.

Identify the economic sectors of industrialized economies and their components.

Conceptualize the principle of maturity matching in financing projects.

Understand the concepts of moral hazard and agency problems in financial contexts.

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Definitions:

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm's output expands, often due to complexities and inefficiencies at larger scales.

Long-Run Average Total Cost

The cost per unit of output incurred when all factors of production, including capital, are variable, indicating the lowest possible cost of production for each level of output when the scale of operation is changed.

Total Variable Cost

The sum of all costs that vary directly with the level of production or output, including costs for materials, labor, and energy.

Marginal Cost

The extra financial burden of producing an additional unit of a product or service.