When costs are capitalized, they are recorded as a long-term asset. Consequently the cash flow shows up under cash flows from investing activities. Capitalization of interest is an example. Instead of being recorded as interest expense, it is added to the cost of the asset being constructed. It causes the cash flow to be reported as an investing cash flow rather than an operating cash flow.

Portfolio duration will NOT necessarily increase as more bonds are included in the portfolio.
If the bonds being added to the portfolio had low durations, than the portfolio duration, which is just the weighted average of the individual durations, would decrease.

g = (retention rate)(ROE) ROE = (net profit margin)(asset turnover)(equity multiplier) =
(.15)(0.267)(4.5) = 0.180 g = (1 - .3)(0.180) = (.7)(0.18) = 0.126 or 12.6%

Bondholders are interested in the debt utilization ratios which in this case are the times interest earned and total debt to total assets.

I). However, merchandise shipped 'FOB shipping point' becomes the property of the buyer as soon as the goods leave the shipping point of the seller.
II). If the ending inventory is understated, cost of goods sold will be overstated and the net income for the same period will be understated. The retained earnings however, will be understated, because understated net income for the period will be closed to the Retained Earnings account to the Retained
Earnings account.
III). When ending inventory is overstated, the net income of the period will also be overstated. With ending inventory becoming the beginning inventory of the subsequent period, the error will cause the net income of the following period to be understated.
IV). The overstated ending inventory will become the beginning inventory of the subsequent year, overstating the cost of merchandise available for sale and the cost of goods sold of the subsequent year, and understating net income.