An item that should have been treated as an operating expense in year 1 was instead capitalized as property, plant, and equipment. What is the result of this improper treatment? Select all that apply.

Fixed assets in year 1 are understated.

Net income in future years is overstated.

Net income in future years is understated.

Expenses in year 1 are understated.

Net income in year 1 is overstated.