You are determining the planning materiality (PM) for the statutory audit of Starling Co., a production company that operates in a non-regulated industry. Historically, the entity is profitable, with steady levels of pretax income between MU 8 million and MU 10 million. During this year, the entity disposed of its long-lived intangible asset for a gain of MU 5 million, bringing the overall pre-tax income to MU 14 million. This long-lived intangible asset relates to the patents that the entity is no longer using in its operations and will not be replacing them with similar assets in the future. The entity has no plans of going public in the next 5 years, and no other factors for that would prohibit us from using the lower end of the range percent for determining the planning materiality. Considering this scenario, what would be the most likely result of your planning materiality assessment? Set the PM at MU 900 thousand, because disposal of the long-lived asset is a nonrecurring item and the factors that allow us to use the higher percent of the range for PM are present. Set the PM at MU 1,400 thousand, because the entity is historically profitable and the factors that allow us to use the higher end of the range for PM are present. Set the PM at MU 700 thousand, because disposal of the long-lived asset is an unusual transaction that increases the audit risk, thus warranting the use of the lower percentage of the range for PM.