6. When computing the amount of interest cost to be capitalized, the concept of "avoidable interest" refers to A) a cost of capital charge for stockholders' equity. B) that portion of weighted-average accumulated expenditures on which no interest cost was incurred. C) the total interest cost actually incurred. D) that portion of total interest cost which would not have been incurred if expenditures for asset construction had not been made.
6. When computing the amount of interest cost to be capitalized, the concept of "avoidable interest" refers to A) a cost of capital charge for stockholders' equity. B) that portion of weighted-average accumulated expenditures on which no interest cost was incurred. C) the total interest cost actually incurred. D) that portion of total interest cost which would not have been incurred if expenditures for asset construction had not been made.
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 4MC: Which of the following statements about capitalizing costs is correct? A. Capitalizing costs refers...
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6. When computing the amount of interest cost to be capitalized, the concept of "avoidable interest" refers to
A) a cost of capital charge for stockholders' equity. B) that portion of weighted-average accumulated expenditures on which no interest cost was incurred. C) the total interest cost actually incurred. D) that portion of total interest cost which would not have been incurred if expenditures for asset construction had not been made.
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