Bert Corporation, a Calendar-Year Taxpayer, Owns Property in States M $\quad$

Bert Corporation, a calendar-year taxpayer, owns property in States M and O. Both M and O require that the average value of assets be included in the property factor. M requires that the property be valued at its historical cost, and O requires that the property be included in the property factor at its net depreciated book value. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Account Balances at Beginning of Year }$
$\begin{array}{lrrr} & \text { State } M & \text { State } O & \text { Totals } \\\text { Inventories } & \$ 200,000 & \$ 300,000 & \$ 500,000 \\\text { Buil ding \& machinery (cost) } & 700,000 & 300,000 & 1,000,000 \\\text { Accumulated depreciation } & (150,000) & (50,000) & (200,000) \\\text { Land } & \underline{400,000} & \underline{200,000} & \underline{600,000} \\\text { Totals } & \underline{\$ 1,150,000} & \underline{\$ 750,000} & \underline{\$ 1,900,000}\end{array}$


$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Account Balances at Year- End }$
$\begin{array}{lrrr} & \text { Sate } M & \text { State O } & \text { Totals } \\\text { Inventories } & \$ 400,000 & \$ 100,000 & \$ 500,000 \\\text { Buil ding \& machinery (cost) } & 800,000 & 500,000 & 1,300,000 \\\text { Accumulated depreciation } & (300,000) & (100,000) & (400,000) \\\text { Land } & \underline{400,000} & \underline{\mathbf{\$ 0 0 , 0 0 0}} & \underline{600,000} \\\text { Totals } & \underline{\mathbf{\$ 3 0 0 , 0 0 0}} & \underline{\mathbf{\$ 0 0 , 0 0 0}} & \underline{\mathbf{\$ 2 , 0 0 0 , 0 0 0}} \\\\\text { Annual rent payments } & \underline{\mathbf{\$ 5 0 , 0 0 0}} & \underline{\mathbf{\$ 2 5 , 0 0 0}}\end{array}$ Bert's State M property factor is:

A) 75.0%.
B) 66.7%.
C) 64.9%.
D) 64.5%.