borrows $500 million from a bank to finance the construction of its headquarters building. The terms of the loan are as follows: term of the loan is three years; annual interest is 14%; annual payment of interest only, and principal payable company at the end of the term. It takes two years to build the building, during which time the company earns $10 million on the unspent loan proceeds. How much of the net loan carrying cost must be capitalized? a. $10 million b. $140 million c. $130 million d. $340 million