Desert Company plans to build a new office complex at the same site on which their current office complex is located. Demolition of the old building was completed on February 15th. Construction of the new office complex began on March 1st and was completed November 30th of the same year. Construction expenditures paid to sub-contractors were made as follows: March 1 $624,940 June 1 $872,503 September 1 $1,152,537 November 1 $1,400,416 Desert borrowed a 2,000,000.8%, 2-year note on February 1st to help finance construction. Interest will be paid annually. The company's only other outstanding debt was a $3,100,000,99 10- year note payable Given this information, determine the amount of interest that would be capitalized and included as a part of the historical cost of the building round to the nearest $1 **the problem is not asking for the total historical cost of the building, just the amount of interest to capitalize Feb 1 interest incurred? Feb 15 Demolition of old building is capitalized as part of the HC of the Land March 1 $624,940 Construction begins, 1st expenditure June 1 $872,503 September 1 $1,152,537 Nov 1 $1,400,416 $4,050,396 Nov 30 Construction ends CAPITALIZATION PERIOD = 9 MONTHS? Beginning March 1st, Ending Nov 30th March 1 June 1 September 1 Nov 1 $624,940 12/31 $872,503 0.6666666667 $1,152,537 0.3333333333 $1,400,416 0 $624.940.00 $581,668.67 $384,179 00 $0.00 $1,590,787.67 WAAE NO need to calculate WACC, only one non-specific borrowing! WAAE $1,590,788 Actual Specific Non Specific Avoid 8% $127.263