Train Company paid $8 million to acquire a franchise at the beginning of 20X5 that was expensed in 20X5. If Train had elected to capitalize the franchise as an intangible asset and amortize the cost of the franchise over eight years, what effect would this decision have on Train's 20X5 cash flow from operations (CFO) and 20X6 debt-to-assets-ratio? —— 财会经济>CFA特许金融分析师 > CFA考试（Level Ⅰ） > Study Session 10　Financial Reporting and Analysis Financial Reporting Quality and Financial Statement Analysis

财会经济>CFA特许金融分析师 > CFA考试（Level Ⅰ） > Study Session 10　Financial Reporting and Analysis Financial Reporting Quality and Financial Statement Analysis

单选题 编号：2688756

1. Train Company paid $8 million to acquire a franchise at the beginning of 20X5 that was expensed in 20X5. If Train had elected to capitalize the franchise as an intangible asset and amortize the cost of the franchise over eight years, what effect would this decision have on Train's 20X5 cash flow from operations (CFO) and 20X6 debt-to-assets-ratio?

A.Both would be higher with capitalization.
B.Both would be lower with capitalization.
C.One would be higher and one would be lower with capitalization.

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