Municipal Bonds with a Serial Component Are Sold on the Basis

Municipal bonds with a serial component are sold on the basis of coupon bids. Bids may be evaluated according to either net interest cost or true interest cost. Evaluations should use true interest cost because:

A) it is easier to compute.
B) net interest cost leads to biased choices when bond issues are large.
C) true interest cost recognizes the time value of money.
D) None of the above.