Example ABC begins construction on a warehouse on 1/1/19 and completes on 12/31/19 Expenditures on DM, DL & MOH are as follows: 1/1/19 6/30/19 9/30/19 600,000 300,000 100,000 Debt outstanding during the construction period: 1/1/19 1/1/17 1/1/15 2 year note for Construction $500,000, 4% issued a 5 year note $200,000, 3% issued a 20 year bond payable $800,000, 6% 1. Calculation of WAAE (Weighted Average Accumulated Expenditures)
Example ABC begins construction on a warehouse on 1/1/19 and completes on 12/31/19 Expenditures on DM, DL & MOH are as follows: 1/1/19 6/30/19 9/30/19 600,000 300,000 100,000 Debt outstanding during the construction period: 1/1/19 1/1/17 1/1/15 2 year note for Construction $500,000, 4% issued a 5 year note $200,000, 3% issued a 20 year bond payable $800,000, 6% 1. Calculation of WAAE (Weighted Average Accumulated Expenditures)
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
Related questions
Question
![Example
ABC begins construction on a warehouse on 1/1/19 and completes on 12/31/19
Expenditures on DM, DL & MOH are as follows:
1/1/19
6/30/19
9/30/19
600,000
300,000
100,000
Debt outstanding during the construction period:
1/1/19
1/1/17
1/1/15
2 year note for Construction $500,000, 4%
issued a 5 year note $200,000, 3%
issued a 20 year bond payable $800,000, 6%
1. Calculation of WAAE (Weighted Average Accumulated Expenditures)
2. Calculation of Avoidable Interest
WAAE
interest
Avoidable interest
rate](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F78e5039f-b7aa-4905-816c-7ac6583fad5f%2F597c1728-0572-40c9-94a0-9436356f516f%2Fcpnvfec_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Example
ABC begins construction on a warehouse on 1/1/19 and completes on 12/31/19
Expenditures on DM, DL & MOH are as follows:
1/1/19
6/30/19
9/30/19
600,000
300,000
100,000
Debt outstanding during the construction period:
1/1/19
1/1/17
1/1/15
2 year note for Construction $500,000, 4%
issued a 5 year note $200,000, 3%
issued a 20 year bond payable $800,000, 6%
1. Calculation of WAAE (Weighted Average Accumulated Expenditures)
2. Calculation of Avoidable Interest
WAAE
interest
Avoidable interest
rate
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