X Inc. is constructing a new plant for its business. X pays $10,000,000 to the builder on March 31, 20x0 and completes the plant on December 31, 20x0. X"s borrowing rate is 5%.

During 20x0 X incurred $325,000 of interest expense.

X should capitalize _________ of interest to the cost of the plant.

Group of answer choices

$375,000

X management can capitalize either $325,000 or $375,000.

$325,000

$600,000