Company was constructing fixed assets that qualified for interest capitalization. The company

had the following outstanding debt issuances during the entire year of construction:

$$6,000,000$ face value, $7\%$ interest

$$8,000,000$ face value, $9\%$ interest

None of the borrowings were specified for the construction of the qualified fixed asset.

Average expenditures for the year were $$1,000,000.$ What interest rate should the company

use to calculate capitalized interest on the construction?

$9\mathrm{.}14\%$

$7\mathrm{.}00\%$

$8\mathrm{.}14\%$

$9\mathrm{.}00\%$