Question
Foothills Power Company begins a 2-year construction project on a power plant on January 1, 2019. The following information is available: The company borrows
Foothills Power Company begins a 2-year construction project on a power plant on January 1, 2019. The following information is available: The company borrows $10 million on January 1, 2019, at 12%, specifically for use on the project. The company's other borrowings are: $20 million at 10% $60 million at 8% The expenditures for the project, incurred evenly each year (excluding capitalized interest from previous years), are as follows: $6,000,000 in 2019 $11,460,000 in 2020 $1,800,000 in 2021
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