Two firms build identical buildings with identical costs over the same 2-year period. Firm A pays for the $1 million cost of construction with general cash flow and has no debt on its books. Firm B borrows the $1 million to fund construction at a cost of 10 percent. When the buildings are completed (at the end of two years), at what cost will the firms report the buildings on their balance sheets? —

单选题 编号：2692479

1. Two firms build identical buildings with identical costs over the same 2-year period. Firm A pays for the $1 million cost of construction with general cash flow and has no debt on its books. Firm B borrows the $1 million to fund construction at a cost of 10 percent. When the buildings are completed (at the end of two years), at what cost will the firms report the buildings on their balance sheets?

A.FirmA,$1,200,000;Firm B,$1,200,000.
B.FirmA,$1,200,000;Firm B,$1,000,000.
C.FirmA,$1,000,000;Firm B,$1,200,000.

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