HW6 - Total cost $5,626,923 Depreciation Exp.= (Total cost...

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(a) Weighted-Average  Accumulated Expenditure x Interest Rate = Avoidable Interest $2,000,000  12% $240,000  1,800,000  10.38% 186,923 $3,800,000  $426,923  (b) Construction loan $2,000,000 x 12% = $240,000 Short-term loan $1,600,000 x 10% = 160,000 Long-term loan $1,000,000 x 11% = $110,000 Actual interest $510,000 Avoidable int. < Actual int. Cost $5,200,000  Interest capitalized $426,923 
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Unformatted text preview: Total cost $5,626,923 Depreciation Exp.= (Total cost -$300,000) / 30 yrs = Other Principal Interest Short-term loan, 10% $1,600,000 $160,000 Long-term loan, 11% 1,000,000 110,000 $2,600,000 $270,000 Weighted-avg- int. rate = Total int. / total principal = $270,000 / $2,600,000 = 0.1 $177,564...
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This note was uploaded on 09/27/2011 for the course MGT 131 taught by Professor ? during the Spring '11 term at San Diego.

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HW6 - Total cost $5,626,923 Depreciation Exp.= (Total cost...

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