James Purchased a New Business Asset (Three-Year Personalty) on July

question 16

Multiple Choice

James purchased a new business asset (three-year personalty) on July 23, 2019, at a cost of $40,000.James takes additional first-year depreciation but does not elect Section 179 expense on the asset.Determine the cost recovery deduction for 2019.

• A)$8,333
• B)$26,666
• C)$33,333
• D)$40,000

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Definitions:

Risk-Free Rate

The rate of return on an investment with no risk of financial loss, typically represented by the yield on government bonds.

Market Risk Premium

The extra return investors expect to earn from holding a risky market portfolio instead of risk-free securities.

Beta

An indicator of how much a stock fluctuates in comparison to the general market, with a beta above 1 signifying more volatility than the market average.

Required Rate Of Return

The lowest yearly percentage gain necessary to attract individuals or organizations to invest in a specific security or project.