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Business acquires general machinery at price of $1,000,000 on March 1...

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Accounting

Business acquires general machinery at price of $1,000,000 on March 1 and a patent with five years remaining life at a cost of $800,000 on August 1. How much allowable expensing can Business take for the year from these capital assets in order to maximize long-term tax deferral?
Assume: $2M pre-DIEP, pre-CCA net income; a discount rate of 10%; a tax rate of 25%.
Consider 3 options:
1.maximize patent
2.maximize machinery, patent class 44
3.maximize machinery, patent class 14

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