Reference no: EM133064887
Problem - In February 2018, ABC Corp. began the construction of a 10 story building. The construction is expected to be completed by January 2019.
During 2018, the following payments were made:
Apr 1: $1,000,000
Jun 1: $1,500,000
Aug 1: $900,000
Oct 1: $950,000
No asset specific debt was incurred. During 2018, ABC's general debt consisted of the following: $2 Million, 5%, 2-year note, $1.2 Million, 4.5%, 2-year note, $0.75 Million, 3%, 5-year note. Required:
a) Calculate the weighted-average accumulated expenditures for the year ended December 31, 2018.
b) Calculate the weighted-average capitalization rate on ABC's general-purpose debt for the year ended December 31, 2018.
c) Calculate the avoidable borrowing costs.
d) Calculate the amount of ABC's borrowing costs that should be capitalized.
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