单选题 The management of Berger Investments has changed their policy and will capitalize some costs instead of expensing them. Due to the new policy, Berger will:

A. have smoother reported income over time.
B. report the same income pattern as when it expenses the costs.
C. report a smooth income pattern initially, but income variability will increase over time.

【正确答案】 A

【答案解析】If management decides to capitalize costs instead of expensing them, it will report smoother repotted income over time. If the firm decided to expense costs as incurred, it will have greater variability in reported income. This variability declines as the firm matures and is lower for larger firms.