All categories

2 years ago

Interest is capitalized when incurred in connection with the construction of plant assets because_______.

1 answer:

7 0

Interest is capitalized when incurred in connection with the construction of plant assets because, during construction, the asset is not generating revenue

<h3>What is Interest?</h3>

This refers to the amount or rate that is added to a principal amount and this is usually done when a loan is collected.

Hence, we can see that when plant assets are being constructed, interest is capitalized and the main reason why this happens is that the asset is not generating revenue.

Furthermore, actual interest is the only thing that should be capitalized and this is because, during construction, the asset is not generating revenue and therefore companies should defer (capitalize) interest cost.

Thus, Interest is capitalized when incurred in connection with the construction of plant assets because, during construction, the asset is not generating revenue.

Read more about interest capitalization here:

brainly.com/question/417585

#SPJ1

You might be interested in

A woman went to the Beneficial Loan Company and borrowed $10,000. She must pay $323.53 at the end of each month for the next 60

Alisiya [41]

Answer:

The Interest rate is 2%

Explanation:

The formula for computing the rate is as using the excel:

=Rate(nper,Pmt,pv,fv,type)

where

nper is number of years which is 60 months

PMT is monthly payment which is $323.53

PV is Present value which is -$10,000

FV is Future value which is $0

Type is also 0

So, putting the values above:

=Rate(60,323.53,-10000,0)

= 2%

Therefore, the rate of interest is 2%, which is monthly to be paid.

3 0

3 years ago

What is an example of a good?

MrRa [10]

Answer: a dog groomer

Explanation:

because they help keep your dogs clean

6 0

2 years ago

Suppose that a person's wealth is $ and that her yearly income is $. Also suppose that her money demand function is given by

vfiekz [6]

Answer:

50,000 - 60,000( 0.25 - i)
C. increases by $ 6,000
A. the demand for bonds but has no effect on the demand for money

Explanation:

1. Demand for bonds is the difference between a person's wealth and their demand for money.

Demand for bonds = W - Md

= 50,000 - 60,000( 0.25 - i)

2. Assuming an interest rate of 0%.

Demand for bonds = 50,000 - 60,000( 0.25) = $35,000

Interest increases by 10%

Demand for bonds = 50,000 - 60,000( 0.25 - 0.1) = $41,000

Difference = 41,000 - 35,000 - $6,000

3. There is no provision in the money demand formula for wealth but there is in the demand for bonds formula. This means that if wealth increases, demand for bonds will increase as well but there will be no change in demand for money.

7 0

3 years ago

EcoAthlete determines that the target market for its running shoes is people who are environmentally conscious. It uses only env

Whitepunk [10]

Answer:

C) Lifestyle and Behavior

Explanation:

The reason is that Eco-Athlete is using its customer behavior and lifestyles to target a particular market segment which has common thinking and opinion about a particular item. In this case, Eco-Athlete is using Eco-friendly items because its customer are environmentally conscious which is their behavior that effects their lifestyle. So the company Eco-Athlete is basically using lifestyle and behavior dimension of market segmentation.

3 0

3 years ago

Which quality is a requirement In order for a destination to become a tourism destination area (TDA)?

JulsSmile [24]

C, otherwise there is no reason to go

8 0

3 years ago

Read 2 more answers