Elcox Inc. spent $2.3 million on a new advertising campaign this year. Which of the following statements is true?
A. Elcox is allowed to deduct the $2.3 million cost.
B. The $2.3 million cost results in an unfavorable book/tax difference.
C. Elcox must capitalize the $2.3 million cost.
D. Elcox is allowed to deduct the $2.3 million cost on this year's tax return only if it expenses the advertising costs for financial statement purposes.
Answer: A
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