Which of the following is not a True statement about the Allowance for Funds Used During Construction (AFUDC)?
A) AFUDC may have either a debt component or an equity component.
B) The amount credited to AFUDC may exceed the amount of interest paid during the period on bonds issued for construction.
C) AFUDC may be credited for an imputed amount of interest on the utility's own funds used for construction.
D) AFUDC may include the total amount of borrowing during construction.

Question

Quizplus · Accepted Answer

The statement "AFUDC may include the total amount of borrowing during construction" is not true. AFUDC only represents the cost of financing the construction of an asset, not the actual borrowing or financing activities.

Which of the Following Is Not a True Statement About