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Thursday, November 15, 2007


Throughout the construction of its new soap manufacturing facility, Durden & Company has capitalized interest expense on their construction load. The contruction loan is a 3-year, $12 million, variable-rate loan based on LIBOR plus 250 basis points. The loan has been outstanding for two years and the company expects to capitalize a total of $8 million in interest expens.e After the construction of the facility is complete, which of the following will occur? Durden & Company will experience:
A. an increase in cash flow from oerations.
B. higher net cash flow.
C. a decrease in the operating profit margin.
D. an decrease in the debt ratio.

Schweser的教授们都是Fight Club的粉丝。


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