8. Zahir company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $900,000 on March 1, $600,000 on June 1, and $1,500,000 on December 31. Zahir company borrowed $500,000 on March 1 on a 5-year, 12% note to finance the construction of building. In addition, the company had outstanding all year a 10%, 5-year $1,000000 note payable and an 11%, 4-year, $1,750,000 note payable. Compute the following: (a) Weighted-average accumulated expenditure (b) Capitalization rate used for interest capitalization purpose (c) Avoidable interest

8. Zahir company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $900,000 on March 1, $600,000 on June 1, and $1,500,000 on December 31. Zahir company borrowed $500,000 on March 1 on a 5-year, 12% note to finance the construction of building. In addition, the company had outstanding all year a 10%, 5-year $1,000000 note payable and an 11%, 4-year, $1,750,000 note payable. Compute the following: (a) Weighted-average accumulated expenditure (b) Capitalization rate used for interest capitalization purpose (c) Avoidable interest

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Whispering Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $5,400,000 on March 1, $3,600,000 on June 1, and $9,000,000 on December 31.Whispering Company borrowed $3,000,000 on March 1 on a 5-year, 10% note to help finance construction of the building. In addition, the company had outstanding all year a 12%, 5-year, $6,000,000 note payable and an 11%, 4-year, $10,500,000 note payable. Compute avoidable interest for Whispering Company. Use the weighted-average interest rate for interest capitalization purposes
Grouper Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1.440.000 on March 1. $960.000 on June 1. and $2 400.000 on December 31 Grouper Company borrowed $800,000 on March 1 on a 5-year. 10% note to help finance construction of the building. In addition, the company had outstanding all year a 12%, 5- year, $1,600.000 note payable and an 11%. 4-year. $2,800,000 note payable. Compute avoidable interest for Grouper Company. Use the weighted average interest rate for interest capitalization purposes.
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Sweet Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $4,860,000 on March 1, $3,240,000 on June 1, and $8,100,000 on December 31. Sweet Company borrowed $2,700,000 on March 1 on a 5-year, 10% note to help finance construction of the building. In addition, the company had outstanding all year a 12%, 5-year, $5,400,000 note payable and an 11%, 4-year, $9,450,000 note payable. Compute avoidable interest for Sweet Company. Use the weighted-average interest rate for interest capitalization purposes. (Round "Welghted-average interest rate" to 4 decimal places, e.g. 0.2152 and final answer to O decimal places, e.g. 5,275.) Avoidable interest 2$
Shamrock Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $3,600,000 on March 1, $2,400,000 on June 1, and $6,000,000 on December 31. Shamrock Company borrowed $2,000,000 on March 1 on a 5-year, 10% note to help finance construction of the building. In addition, the company had outstanding all year a 12%, 5-year, $4,000,000 note payable and an 11%, 4-year, $7,000,000 note payable. Compute avoidable interest for Shamrock Company. Use the weighted-average interest rate for interest capitalization purposes. (Round "Weighted-average interest rate" to 4 decimal places, e.g. 0.2152 and final answer to O decimal places, e.g. 5,275.) Avoidable interest $
Riverbed Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,620,000 on March 1, $1,080,000 on June 1, and $2,700,000 on December 31.Riverbed Company borrowed $900,000 on March 1 on a 5-year, 10% note to help finance construction of the building. In addition, the company had outstanding all year a 12%, 5-year, $1,800,000 note payable and an 11%, 4-year, $3,150,000 note payable. Compute avoidable interest for Riverbed Company. Use the weighted-average interest rate for interest capitalization purposes. (Round "Weighted-average interest rate" to 4 decimal places, e.g. 0.2152 and final answer to 0 decimal places, e.g. 5,275.)
Zahir company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $900,000 on March 1, $600,000 on June 1, and $1,500,000 on December 31. Zahir company borrowed $500,000 on March 1 on a 5-year, 12% note to finance the construction of building. In addition, the company had outstanding all year a 10%, 5-year $1,000000 note payable and an 11%, 4-year, $1,750,000 note payable. Compute the following:(a) Weighted-average accumulated expenditure.(b) Capitalization rate used for interest capitalization purpose.(c) Avoidable interest
Vaughn Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,968,000 on March 1, $1,248,000 on June 1, and $3,046,000 on December 31. Vaughn Company borrowed $1,086,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,448,000 note payable and an 10%, 4-year, $3,546,000 note payable. Compute avoidable interest for Vaughn Company. Use the weighted-average interest rate for interest capitalization purposes. (Round weighted- average interest rate to 4 decimal places, e.g. 0.2152 and final answer to O decimal places, e.g. 5,275.) Avoidable interest $
Wildhorse Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $2,004,000 on March 1, $1,284,000 on June 1, and $3,055,000 on December 31. Wildhorse Company borrowed $1,163,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, $2,377,000 note payable and an 11%, 4-year, $3,691,000 note payable. Compute avoidable interest for Wildhorse Company. Use the weighted-average interest rate for interest capitalization purposes. (Round weighted-average interest rate to 4 decimal places, e.g. 0.2152 and final answer to 0 decimal places, e.g. 5,275.) Avoidable interest
Waterway Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $2,016,000 on March 1. $1,296,000 on June 1, and $3,052,090 on December 31. Waterway Company borrowed $1,137,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, $2,453,000 note payable and an 11%, 4-year, $3,176,000 note payable. Compute avoidable interest for Waterway Company. Use the weighted-average interest rate for interest capitalization purposes. (Round weighted-average interest rate to 4 decimal places, e.g. 0.2152 and final answer to 0 decimal places, e.g. 5,275.) Avoidable interest $ 11.36
Kingbird Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $2,040,000 on March 1, $1,320,000 on June 1, and $3,051,830 on December 31. Kingbird Company borrowed $1,040,720 on March 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, $2,324,600 note payable and an 11%, 4-year, $3,389,200 note payable. Compute the weighted-average interest rate used for interest capitalization purposes. (Round answer to 2 decimal places, e.g. 7.58%.) Weighted-average interest rate
Novak Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $2,088,000 on March 1, $1,236,000 on June 1, and $3,076,000 on December 31. Novak Company borrowed $1,055,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,217,000 note payable and an 10%, 4-year, $3,162,000 note payable. Compute avoidable interest for Novak Company. Use the weighted-average interest rate for interest capitalization purposes. (Round weighted- average interest rate to 4 decimal places, e.g. 0.2152 and final answer to 0 decimal places, e.g. 5,275.) Avoidable interest

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