Details of a loan to construct a power plant at a cost of $10,000,000. 75% of the loan is financed by a general pool of debt; 40% of the general pool cost 12% and 60% of the general pool of loans cost 10%. The remainder of loan to construct the power plant is from a construction loan at a cost of 6%. Calculate the borrowing cost to capitalize

a.

1090000

b.

910,000

c.

960,000

d.

1,040,000

Tropical Metals Limited a manufacturing firm has Property Plant & Equipment with a cost of $62M; useful life of 15 years and a residual value of $2M. What is the carrying value of the asset at the end of its 8th year.

a.

$36m

b.

$32M

c.

$30m

d.

$28M

Lukes Machine Shop wanted a loan and negotiated one with First Jamaican Bank Ltd. The firm incurred a number of costs associated with the loan. Which of the following is not one of the borrowing costs that Luke might have incurred and accrued?

a.

Finance charges in respect of finance leases recognized in accordance with IAS 17 - Leases

b.

Amortization of discounts or premiums relating to borrowings

c.

Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest charges

d.

Finance charges in respect of operating leases recognized in accordance with IAS 17