iew PoliciIes Current Attempt in Progress Teal Mountain Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1.2 million on March 1, $0.9 million on June 1, and $3 million on December 31. Teal Mountain Company borrowed $1 million on March 1 on a five-year, 12% note to help finance the building construction. In addition, the company had outstanding all year a $1-million, five-year, 14% note payable and a $3.7-million, four-year, 16% note payable. Calculate the appropriate capitalization rate on general borrowings that would be used for capitalization of borrowing costs. (Round answer to 2 decimal places, e.g. 52.75%.)
iew PoliciIes Current Attempt in Progress Teal Mountain Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1.2 million on March 1, $0.9 million on June 1, and $3 million on December 31. Teal Mountain Company borrowed $1 million on March 1 on a five-year, 12% note to help finance the building construction. In addition, the company had outstanding all year a $1-million, five-year, 14% note payable and a $3.7-million, four-year, 16% note payable. Calculate the appropriate capitalization rate on general borrowings that would be used for capitalization of borrowing costs. (Round answer to 2 decimal places, e.g. 52.75%.)
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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Teal Mountain Company is constructing a building. Construction began on February 1 and was completed on December 31.
Expenditures were $1.2 million on March 1, $0.9 million on June 1, and $3 million on December 31. Teal Mountain Company
borrowed $1 million on March 1 on a five-year, 12% note to help finance the building construction. In addition, the company had
outstanding all year a $1-million, five-year, 14% note payable and a $3.7-million, four-year, 16% note payable.
Calculate the appropriate capitalization rate on general borrowings that would be used for capitalization of borrowing costs. (Round
answer to 2 decimal places, e.g. 52.75%.)
Capitalization Rate
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