Bhaskar Purchased a New Factory Building and Land on September

question 56

Multiple Choice

Bhaskar purchased a new factory building and land on September 10, 2018, for $3,700,000. ($500,000 of the purchase price was allocated to the land.) He elected the alternative depreciation system (ADS) . Determine the cost recovery deduction for 2019.

• A) $23,328
• B) $80,000
• C) $82,048
• D) $92,500
• E) None of the above

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Definitions:

Long Run

A period in which all inputs can be adjusted, allowing firms to change their production capacity and industries to enter or exit markets.

Perfect Competitor

A theoretical firm in a perfectly competitive market where it is a price taker, and there are no barriers to entry or exit.

Long Run

A time frame where all production elements and expenses can change, enabling companies to modify all resources.

Optimum Efficiency

The most favorable condition where resources are used in the best possible way to achieve maximum productivity and economic benefits.