NO.PZ2024011002000076
问题如下：
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?选项：
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.解释：
If the cost were amortized rather than expensed, the $8 million cost of the franchise would be classified as an investing cash flow rather than an operating cash flow, so CFO would increase (and CFI decrease). The asset created by capitalizing the cost would increase assets, so the debt-to-assets ratio would decrease.如果资本化的话，26年需要进行一笔折旧，那么资产相对于直接购买来说要减少；所以D/A应该是上升的？
