Chris Co. purchased a piece of equipment and incurred the following costs. Which of these costs is properly capitalized and recorded as part of the cost of the equipment?
I. Freight charges to transport the equipment to the factory.
II. Assembly of the equipment at the factory.
III. Testing costs to ensure the equipment was properly installed.
IV. The manufacturer allowed a 3% discount for early payment, and Chris Co. paid in cash at delivery.

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