Cougar subsidiary, Extravagant Linens, is installing a new plant at its production facility. Prepare an analysis on the cost that can be capitalized in accordance with IAS 16. Extravagant Linens has incurred the following costs:

1. Cost of the plant (cost per supplier's invoice plus taxes) $2,500,000
2. Initial delivery and handling costs 200,000
3. Cost of site preparation 600,000
4. Consultants used for advice on the on the acquisition 700,000
5. Interest charges paid to supplier of plant for deferred credit 200,000
6. Estimated dismantling costs to be incurred after 7 years 300,000
7. Operating losses before commercial production 400,000