Mary Purchased a New Five-Year Class Asset on March 7

question 35

Multiple Choice

Mary purchased a new five-year class asset on March 7, 2017. The asset was listed property (not an automobile) . It was used 60% for business and the rest of the time for personal use. The asset cost $900,000. Mary made the § 179 election. The income from the business before the § 179 deduction was $600,000. Mary also takes additional first-year depreciation. Determine the total deductions with respect to the asset for 2017.

• A)$180,000
• B)$378,000
• C)$528,000
• D)$600,000
• E)None of the above

Understand the implication of risk aversion changes on cost of capital using the SML approach.

Recognize the factors affecting a firm's overall cost of equity.

Understand that the cost of equity is an estimate and not directly observable in the financial markets.

Know the variables affecting the security market line (SML) approach to estimating expected return on a risky asset.

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Definitions:

Psoriasis

A chronic autoimmune skin condition that causes the rapid buildup of skin cells, leading to scaling on the skin's surface.

Eczema

A medical condition that causes the skin to become inflamed or irritated, characterized by itchiness, red skin, and a rash.

Eccrine Sweat Glands

Specialized sweat glands that help regulate body temperature through the release of a water-based secretion.