​Cranberry Corp

question 143

Multiple Choice

​Cranberry Corp.constructed equipment to manufacture a new line of home products during 2016.The average balance of accumulated expenditures on the equipment during September through December 2016 was $500,000.Construction started on September 1, 2016 and was still in progress at the end of 2016.If Cranberry borrowed $500,000 for one year on September 1, 2016, to finance the construction, and the interest rate on the construction loan was 6%, how much interest can Cranberry capitalize as part of the equipment cost for 2016?

• A) $ -0-
• B) $10,000
• C) $20,000
• D) $30,000

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Definitions:

Scatterplot

A type of plot or graphical representation displaying values for typically two variables for a set of data.

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Linear Relationships

A relationship between two variables where the change in one variable is directly proportional to the change in another.

Nonlinear Relationships

Nonlinear relationships describe scenarios in data where the change in outcome variable does not correspond to a constant change in predictor variable.