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1 . If interest expense, as reported in the income statement, is used in the denominator of the interest coverage ratio, what is the effect

1 .

If interest expense, as reported in the income statement, is used in the denominator of the interest coverage ratio, what is the effect on the ratio of capitalizing construction interest as compared to expensing the interest immediately?

Group of answer choices

Overstated.

Understated.

Correctly stated.

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