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i) Calculate the capitalization rate ii) Borrowing cost eligible for capitalization a) Mericon Limited has the following loans outstanding as at 31 December 2019. Loan

i) Calculate the capitalization rate

ii) Borrowing cost eligible for capitalization

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a) Mericon Limited has the following loans outstanding as at 31 December 2019. Loan 1 @ 6% (Due since opening date) 600,000 Loan 2 @ 8% (Taken on 1 April 2019) 400,000 Loan 3 @ 9% (Taken on 1 July 2019) 300,000 The company spent following amounts on construction of an asset: 31 January 2019 140,000 1 April 2019 160,000 1 December 2019 20,000 i. Calculate the capitalisation rate. (5) ii. Borrowing cost eligible for capitalisation

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