Which of the following statements about interest costs is correct?

A) interest on money specifically borrowed to finance construction of an asset should be capitalized

B) a proportionate share of all interest incurred during the life of an asset should be capitalized

C) interest cost incurred during construction of an asset can be capitalized

D) no interest should be capitalized

Blythe Company has equipment with an original cost of $150,000 and accumulated depreciation of $40,000. What is the current fair value of the equipment?

A) $150,000

B) $110,000

C) $40,000

D) unable to determine from the information given

When considering how to finance the acquisition of an asset, which of the following statements is true?

A) The amount borrowed should be larger than the cost of the assets acquired.

B) The cash flows generated by the assets should dictate the type of note (noninterest bearing, installment, etc) the company uses to finance the asset.

C) The cash flow required by the type of note used should dictate the type of asset acquired.

D) In order to minimize debt the company should not borrow unless there is no cash to fund the acquisition of the asset.

MMM Inc. had 5,000 shares outstanding on January 1, 2010. MMM Inc. issued 8,000 shares on May 1 and an additional 9,000 shares on August 1, 2010. How many shares will be used to calculated earnings per share (2010).

A) 5,000

B) 14,083

C) 15,225

D) 15,301

E) 22,000