bauru s a a brazilian corporation borrows capital from a local bank to finance the c 1557145

BAURU, S.A., a Brazilian corporation, borrows capital from a local bank to finance the construction of its manufacturing plant. Th e loan has the following conditions:

Th e construction of the plant takes two years, during which time BAURU earned BRL 10 million by temporarily investing the loan proceeds. Which of the following is the amount of interest related to the plant construction (in BRL million) that can be capitalized in BAURU’s balance sheet?

A. 130

B. 140

C. 210